Take a Legal Checkup

It’s important from time to time to take stock of your legal situation and make sure you are appropriately prepared for what might arise. While many people see the doctor once a year and the dentist every six months to make sure that things are going well, individuals and businesses can go decades without talking to a lawyer. Here are a few questions you should ask yourself as a way of self-diagnosing your legal situation and considering how you can be prepared for the future. Nothing in this article is a replacement for formal legal advice, but we offer it as a starting point to consider.

1. Estate Planning: Are you prepared in case you pass away suddenly?

If you’re alive today you need a will! An estate plan means having things in place to care for your family if you pass away. Even if you don’t have much in terms of assets, having a will directs where any proceeds would go from assets that belong to you, any income that comes to you, after your passing, related to your work, any unclaimed funds you might not be aware of, and any personal injury funds that would come from a wrongful death lawsuit. Your will names your executor, a trustee for your kids, if necessary, and establishes who would take care of your kids if you die before they are adults.

Estate plans can include trust formation. A trust provides funds for children and grandchildren when you pass away and can also be used to save your assets from certain types of creditors. Trusts also facilitate long term Medicaid planning. We recommend, as a rule of thumb, checking your will once a year and making sure it still reflects your needs and wishes. Picking a day such as January 1 every year that you remember to check things like your smoke detector, your will, and your estate plan, is a good way of making sure you’re on top of everything you need to do.

Business owners can also make their estate plans consistent with written contracts with partners or investors, and by ensuring that a succession plan is in place. Who will run the business if you die suddenly? And who are the purchasers you have in mind? Your will and other estate plan documents can help to clarify these questions in advance of a crisis.

2. How are your Insurance Policies?

What does your insurance currently cover? Do you know? Having insurance policies to cover your home, auto, and any business you own will protect you from most of the major liabilities that you may face in life. Insurance is important—not only because it will pay any judgments against you, if necessary—but also because it will pay the lawyer who defends you. This can keep you from facing any dramatic and unexpected costs. If you have a property, you should secure premises liability insurance. If you have a business, you should have general business liability insurance. You should maintain car insurance with high limits to cover your own injury and anyone you injured to prevent them from going after your assets.

In addition, you might want to talk to your insurance salesperson about umbrella insurance. Umbrella insurance covers anything these policies don’t and is an added layer of protection. The other good news is that umbrella policies are typically relatively inexpensive for the protection they provide.

3. Setting up an LLC and making sure your business is in order.

 If you’re running a business, there are a lot of things you should consider. If you have an LLC set up, have you registered your Beneficial Ownership Information Registration as required under the Corporate Transparency Act? Have you made sure that your LLC Operating Agreement covers what happens in the case of your disability or death? Do you have a clear agreement with any partners of investors? Is it in writing? Does it cover your rights and obligations to them? Does it also clarify what happens in the event that any of them files for bankruptcy, die, or leave the partnership?

In addition, if you are running a business, it is important that you have contracts in place. Contracts help to prevent misunderstandings and also help you in the event that someone tries to take advantage of you in a business deal. Contracts are an extremely important part of a business plan. And of course, developing a relationship with a business lawyer to call with quick questions is a major part of long-term success in business.

4. Real Estate: Understand what you actually own.

If you own real estate, you may not realize that what you actually own is a “bundle of sticks.” By this we mean that you have different rights to your real estate, but some rights may not have belonged with your land at the time you bought it. This means that there are rights that you don’t own; easements, oil and gas rights, and other rights of access can exist. In addition, finished life estates and remainders may all affect your deed.

If you own real estate, it is important to review your deed to understand what your ownership rights are and how they will change when you pass away. For example, a common mistake that people make is believing they can leave their house to their child when they pass away, despite the fact that they are re-married to someone new. That “new person” may have rights to that real estate, depending on how the deed is written, and depending on other obligations they may have to their spouse under the elective share or other principles under Pennsylvania law.

If you own real estate, it is good to know what you own, to understand your rights and obligations, and to have a lawyer review those things with you.

Conclusion: Call a lawyer today for a legal check up

If you read this article and it raised questions or concerns for you, feel free to call our office and set up a consultation so that we can go over this legal checklist with you. We can also discuss other issues and concerns you have. Although seeing a lawyer is something that most people try to avoid (believe us, we understand!), seeing a lawyer occasionally and doing a check-up can help you to avoid bigger problems down the road. Call to schedule a consultation today.