Katharyn: My first tip in real estate laws is put it in writing. Contracts for the sale of real estate or for a lease for a year or more, generally must be in writing to be enforceable. What I do is not so much transaction work when you’re buying or selling things, it’s real estate litigation involving deals like that would’ve been fallen through, and one of the worst scenarios is where you have two parties who trusted each other and then it reduced it all to writing and then there was a missed understanding or maybe an outright, you know, poor dealing on the part of one or both parties and it’s not in writing. And the courts will not generally admit as evidence, he told me this, she told that. So put it in writing, and have an attorney review it. you’re gonna pay a lot less to a transactional attorney at front than you’ll pay me later to fix it.
Julie: I’m really on the area of personal stuff, and all of you probably have parents, you know, if you ever have to deal with parent affairs and stuff. The power of attorney is a very essential document. It is really just a legal permission split that gives you the power to act in somebody else’s legal behalf. So it’s very important, coz we don’t know when we’re gonna have a stroke or late become mentally incapacitated, it’s very important. It’s also important, and I don’t handle this type, maybe it’s Laurie or Kathy does, but personally, for succession planning in your business, imagine if you’re a sole business owner, and, you know, you’re getting along great and then all of a sudden, boom, there’s a stroke, and who is gonna be able, who’s next in line to you, do you have a succession plan. So that’s all part of an important planning. Any have a question about the power of attorney? Go ahead, Laura.
Laura: Does that, how if you’re married, you need one for, say, your husband and then, also, you need one if your husband is your business partner.
Julie: Okay, Laura’s question was, in case you couldn’t here, you know, if you’re married, do you really need one. I mean, you know, your spouse should have some legal rights in handling your stuff. What if you guys are in business together? It’s still extremely important, because, if there’s an asset that’s just titled in your name, he’s not gonna have any legal control just because she’s your spouse. You know, control over assets is one thing. Also, control over your legal position, you know, with law suit or there was something that you needed, he wont have legal authority, unless he has a power of attorney document signed by you.
Lori: If you set up a business entity and S corp and LLC, if you’re sole proprietor, a single owner, would a court come in and say, would a court come in and say, if you talk about pierce and a corporate veil, which means going through that liability protection, saying it doesn’t exist and saying actually your personal assets are liable. The answer is typically no. typically if you set up your own, once you set up that entity, as long as you respect the entity, as long as you don’t commingle your fund, if you don’t use it as your own, the more you treat it like, the more you treat your business assets like your personal assets, that’s may be more up to maybe pierce that corporate veil. They will be up to say, you’re really not treating this like a company, you’re treating this like your own, your own, your own property. When really you need to think of it as a completely separate, separate entity, those are the assets of the company, those are the moneys of the company, and then you distribute out yourself dividend or salary or whatever to pay your personal expenses. As long as you keep up with the corporate formalities, generally the courts do respect the one with the liability that they offer. Thank you, sure. Well my next tip is put in writing, which I will just talk about a little bit, there’s just some different, I know at real estate it has to be in writing. Other areas, it doesn’t have to be in writing, when you enter into an oral agreement with someone, that’s the contract, it’s enforceable and you may not agree on the terms later on. You may have forgotten what the terms are later on. You may, a year later, come back with that same supplier, that same customer and say, let’s do it like we did last time. Well we might not all remember how we did it last time, so obviously to have a contract will be the best thing. Depending on the complexity of the situation, it may not need to be a full, full blown, full negotiated customize contract. There could be a sort of a form contract, if you’re gonna be in string with the same party with the same type of clients or the same type of customer. You could work with an attorney to establish one type of form contract and you could fill in the terms specific to that, that transaction when it arises. Also, you could have a letter agreement, which is a simple form contract, but again puts it on writing, but the very least I would say is have an email or some sort of contact, or some sort of communication with the other parties that has the key terms which are price, quantity, and delivery. If those are in writing, and those you can agreed to, the rest of it sort of tends to play itself out more and those tends to be the issues that are most heavily disputed, most heavily litigated, and the others a lot more easier for the parties to agree to.
Katharyn: You know, translate this to the people you’re doing business with. The people that maybe you’re investing money with, went into partnership with. If you’re somebody who sells goods and services, are you selling to someone who’s gonna pay you, you know, that kind of thing. And I have, when you get a copy of the tips at the end, I have a website on here that I want to tell you about. Because it’s fairly new over the last two years and it’s free, it’s called Case Net Anywhere Else and the Tips. It covers all the courts of the state of Missouri. St. Louis county is being added now, it’s the last county to be added. You could go on Case Net, this is free, you can go in Case Net and put in someone’s name or their company name and find out if they’re being sued or have any judgments against them. Let’s say you have someone that you sell to, and they’re getting a little slow pay. You could go on there and find out if other people are suing them already to see if maybe you should cut them off or pose a credit limit, you know, or get a little stretch before you’re too deep in the hole with them, it’s great. We tell, of course our landlord client that we have quite a bit, why are you, why are you renting to this tenant that I have already evicted six times. Well, you know, I get tenants to put my kids to summer camps when they were little. But, like I said, you can use it for any kind of, you know, individual entity that you’re thinking about a business relationships with, it’s free. I mean you should probably do other screenings as well, but it’s a really nice site, and I encourage you all to use it.
Julie: you’re in an accident and, you know, you want your love one, but you’re not able to talk or communicate, you’re not conscious. And you want them to be able to be making decisions on your behalf, you need a power of attorney, for health care. Now, as a practice, most hospitals realize, well that’s stupid, it’s her husband out there, you know, I’m gonna go talk to him, but technically they could say, you know, they may have some administrator that comes on and says no we got to start doing this by the book. You wanna make sure that you’ve got a legal document that you’ve already authorized somebody. Have you be able to make medical decisions on your behalf, you know, ready to go in a safe deposit box or something just in case it ever comes up.
Katharyn: And the durable power of attorney’s, you got to go somebody like Julie to get that. Because it goes through very specifically about what you wishes are and then someone will know what and your love ones gonna wanna know all those things, all those questions, how do you want them answered if you cant answer them for yourself. You’re doing them a big favor.
Lori: Legal boiler plate language, that is a lot of times very difficult to understand and a lot of times those are the issues that, or those are the areas that when issues arise may come back to hunt you. Some of those are indemnification provision, that is where you will be responsible for the other parties legal expenses if something goes wrong with the contract. For certain, you need to be careful of indemnified for, I agree to indemnify this party for x, y, and z. That means if something goes wrong in those areas, you’re paying for their legal expenses as well as your own. Limitation liability, where the third party is liable for, for a breach of the contract except for certain situations, well those might be the situations where things might really go wrong, so if their not liable under those situations, you need to be aware of that or try to negotiate those side of the contract. Confidentiality, you need to be aware of those positions, those provisions, what information you can and can not share with other people. Termination, a lot of times, I see termination provisions that are one sided. Where only one party is able to terminate the contract for any reason, so the other party, if they want to get out of the contract, you never think when you’re getting into a contract, how do I get out of it, because that’s, you know, things are going good when you get into a contract. But you wanna make sure you have a way to get out of the contract as well just in case something goes wrong. Even if it’s for a cause or just for some reason, you need to make sure there’s a way for you to get out of the contract as well. And then some other legal provisions, choice of law and venue if there is going to be a law suit. Where, that’s usually where you agreed to be sued. So if you’re dealing with a large supplier and they say choice of law and venue is in New York, if there is a law suit, that law suit is not gonna be on your backyard in St. Louis, except it’s gonna be in New York. So you need to be careful of those as well. And a lot of contracts now offer alternative dispute resolutions. Where you do not have the option to go to court, you’ve agreed ahead of time to go to an arbitrator or mediator to settle the dispute as well. So those are provisions, they’re not necessarily bad, they’re just to be aware of and to make sure that you understand that you’re getting the same benefit of the other parties is getting to when you agreed to those provisions.
Katharyn: My next tip is using a beneficiary deed to pass title and debt, rather than a joint tendency. You may have children, you know, you may have your house, you wanna make sure it doesn’t have to go probate, you have your child you wanted to pass to. Sometimes people put the heir on as a joint tenant. This is good for a lot of reasons, for one thing, it’s not revocable. If they all of a sudden develop the habit of the casino queen or they got a bad spouse, or, you know, become irresponsible in other ways. There an immediate owner and they can force you into court or force the property to be sold right away and get their part of it. Particularly if they’re related to you, the courts don’t give you a lot lee way even if you’re the one who paid for the property and put all the money into it. Those things are often not held against a blood relative. A beneficiaries on the other hand, and someone, like Julie, with elder one practice is probably a good person to go to prepare that. Does invest until you passed away and it’s revocable, so if you change your mind because your kid becomes, you know, go through a bad phase or whatever, you know, that can be fix or passes away, yeah, horrible but it can happen. The other thing about doing that is don’t ever vest someone who’s a minor, because is something where to happen to you before you, before they reach the age maturity, it will be very bad. There will be a lot of fissure of your trustee and they will probably put your one dead beat cousin that cant be trusted in charge of it coz you don’t designate anybody, and you know, it will be a bad result. So beneficiary deed rather than joint tenant and you know, like who else is going to stand up here, go see a lawyer if you’re planning something like that significant. I had a case recently, I had an elderly mother who would work her butt off her whole life caring for the other relatives and everything. Really lives kind of a modest lifestyle, but ended up accumulating real estate that is worth a lot of money. And she did a deeds, deeding it to herself and her kids as joint tenants, one of the husbands got a little greedy and she spent the last years of her life in litigation with her daughters. It broke my heart every time I had to go into court, and this case is horrible. But she just went to a title company and just execute this deeds and didn’t check with anyone about the consequences.
Julie: The beneficiary deed is really a pay on debt deed so, you, it’s just a document, you sign it, you file it with your court of deeds and if the owner passes away the people named as the beneficiary just go to their court of deeds and their automatically the owner of the properties. There’s nothing, you don’t even have to go to the probate court or whatever. So it’s a great inexpensive way to sort of plan for a succession of your real estate. But that being said, it’s important, I find a lot of people just aren’t aware that assets pass according to how they’re titled. So if you have a bank account and you put your daughter on it with you, because you want her to be able to, you know, access stuff if you become incapacitated and then you have a will that said I want it to go you my four kids equally, but you got your daughter titled as a joint owner on everything, well it passes to the other joint donor when you died. Your will doesn’t come into play, so I’ve seen a lot of people get mixed up, a lot of family is ruined. Because that fundamental issue of, you know, when you’re planning for how things suppose to go in your death, you need to be aware that how you titled them is what’s gonna affect it, not necessarily a will or a trust, and I’ll just skip on down here because this is all related. A trust, you know, it avoid, just like a plan, does designation, but it’s separate sort of entity, so it sort of crosses both areas here, but, I mean it’s not a separate corporation or anything, but it’s its own entity. And property has to be titled in the name of it in order for the trust to apply to it. So a lot of people go out, they go to seminars, they hear about a great living trust and I’m gonna do this, I’m gonna avoid probate. And that’s all great, but if you never title your assets in the name of the trust or set them up to pass on your death to a trust, then you’re, you know, beneficiary designation, then you really haven’t accomplish what you are hoping to do, so that’s an important thing to know. Any questions? Lori?
Lori2: Regarding about real estate, I’m not gonna buy some national museum., When you mention the deed of your home, and you and your husband, and god forbid, something happened to when you’re together do we have the ability to quit the complications?
Julie: Yeah.
Lori2: Okay.
Julie: Joint owners, it’s common, a husband and wife can be both owners. So one half, if something happens to one of them, the other one continues as the sole owner and then upon that last to die his death, then it goes to the beneficiary if you’ve done the deed. But the beneficiary deed has to be signed and recorded with the recorder of deeds to be effective. So if you just signed it and keep it in a black box or something, it’s not gonna work. It has to be recorded before the death of the owner.
Katharyn: But one of the good aspect of beneficiary deeds is the title passes immediately, so you don’t have Susie and Billy sitting there arguing about who’s gonna pay the utilities and the taxes and get the place insured for six to twelve months where you go to probate. And immediate procession of the real estate come sometimes be a really good thing. How many people have kids? Do your kids all get along perfectly? It’s what like I told my mother, and my father, I’ve said “I’m not gonna sit there and argue with Laura and Cherry, my sisters about who gets the toaster oven, put it in writing”. You know, you’re doing everyone a favor. As women we are all expected to take care of the family, and these nurturing wives, believe me this is a nurturing way to take care of your family. You’re gonna prevent a lot of fights down the line.
Lori: This is again, when you’re entering in business relationship. You have business partners, they’ll gonna be great, you know, we’re gonna work together. Every things gonna be fine. But there are certain situations down the road where maybe somebody has decided to move on to a different business, they been participating as much as you have hoped. Or maybe somebody wants to retire, maybe somebody died, I mean there’s all sorts of situation instantly come up, and if, while everybody’s getting along at the beginning to agree on what happens when those events occur is very helpful down the road. Not only those triggering events such as death, or retirement or if someone is no longer participating in the business. But also what the price is that you would buy out the other person, and the timing. Maybe the timing of it, of the buy out, you know, how you have to pay them, pay them that money. Just this all sorts of those terms, again this is more along in line to put it in writing but this is one of those things where your business partners, you know, your businesses. It’s business even if you’re in business with friends or people you’ve known for a long time, you know, keep your business your business. And make sure you agree to all, you protect yourself and you agree to those terms upfront.
Julie: I’m gonna switch over to, you know, none of you are at the age where you really that concerned about nursing home care costs for yourself, but you know as we get up there or as our parents get up there, you know, people start to worry about like, this girl get lost to a nursing home, you know, what am I gonna do when there’s long term care insurance out there. And you know, I don’t sell it, I don’t really deal with it, but it is a piece that our society current administration is directing everybody to do. They spent a lot of revision in the laws concerning medical eligibility in the past 5, 6 years, and the thought of our government is we need to be pushing people into long term care insurance. This is the solution for paying long term care costs. And a lot of people think, oh medicare, you know, I’m insured by medicare so that’s gonna cover my nursing home, it doesn’t. It covers maybe the first 20 days you’ve been in the hospital, but after that there’s really not a lot of coverage. So, you know, nursing home care cost something out there that you just don’t think about until you have a love one dealing with it or, you know, god forbid, you, you just got a catastrophic illness to deal with it. So, it’s just something to think about, evaluate if you can afford it, you know, it’s great piece of mind, so, question back there.
Female: We bought it for my mother, but [ inaudible ] and they talked about [ inaudible ]
Julie: Well you know, I’m not an insurance expert, but it’s a relatively new industry. It’s not, you know, I mean new, meaning it’s been around about 20 years, which is kinda new in respect to those things. But in the last few years, it’s really been come a lot competitive. And, you know, I guess and maybe Jenny can speak a little bit more to this but, you know, insurance company have a rating and you wanna make sure you’re buying from one of the top rated places. Coz you certainly want your policy to be around when you need it. But, yeah, I mean not all policy are created equal and insurances, you know, insurance.
Lori: The next topic I want to cover is protecting your companies proprietary information. Any information that you want to keep secret from others, whether it’s a few of, you know, your have a product that has a certain specifics to it that you want to keep separate. But there’s also things that people have a customer list, supplier list, even manuals that you may have created, created for your company that are unique, that you believe add some specific value and have value on its own. You wanna protect that from other people. If other people have that information that they will be able to use it to have, you know, basically some value that you’ve created, somebody else could steal that from you. One of the ways to protect your proprietary information is something as simple as marking your documents with “ Confidential”, basically that says, you know, putting people on notice that, you know, there is, these are proprietary, these are secrets, and their mine. Others are confidentiality agreement and none competition agreement with your employees. If your employees are going to have information on how to run your company efficiently and effectively, you don’t want them to go to another company and take that information with them and help somebody else out, so a none competition agreement can help you with that. They tend to have to be drafted narrowly, you cant say, you know, you cant work in another company ever, you know, they have to be drafted narrowly in scope, but that is the way to protect your information. Also none solicitation agreement, if you’re working with a third party over and over again, you don’t want them to be able to hire your employees. And so a none solicitation agreement can prohibit them from hiring your employees for a certain period of time. There’s also the intellectual property rights, trademarks, copyrights, patents, you could have those both at common law if it makes sense register those at the federal level as well.
Katharyn: Something a lot of us do, and sometimes the negotiations, you know, for renewing your lease or moving to another space can be so painful that by the end of the negotiations you don’t even want to see your landlord anymore, let alone write them that monthly check to keep people from me, like me in your door. One of the things that one thing that can be a helpful option when you’re negotiating your lease with your landlord, as your landlord want a huge security deposit. And in Missouri residential security deposits are limited to no more than 2 months rent, but there’s not limit for commercial security deposits. And let’s face it ladies, don’t you think sometimes they look at us, we cant prove it, but they’re like this is not the guy, you know, and so they want more from us than maybe they would from someone else. A good thing I think to offer, sometimes in lieu of a huge security deposits is a line of credit. First of all, obviously the landlord is gonna look up and say, oh, this person is more savvy than I thought she was about what’s going on here. Secondly, doesn’t tie your money up so much, the cost of providing the security of the line of credit to them, the feet to the bank, could be a lot less than the cost of having your large security deposit tied up for a long period of time. Particularly if you’re expanding or, you know, starting a new business that’s why you’re leasing the space and it could be a good versatile way of handling that obligation at a time like I said, when if you’re renegotiating or moving into a new space, you might be short in ready cash.
Julie: Medicare is the government’s system or program that pays for people’s long term care, you know, nursing care cost, when you ran out of money to become financially eligible. You know, being financially eligible is kind of a relative term, there’s a lot of rules about, you know, when you have, when you need the eligibility requirements, but there’s a lot things that you wanna know ahead of time or you, there’s legal options out there. And I guess, I just wanna stress that if you know anybody that it’s in a nursing home or that has any issue and you know, 6000 dollars a month nursing home care is really starting to get to them. You know, they should pursue it and figure out what legal option are there, are there better things they can do with their funds that legally, that, you know, that they wished they would’ve known about sooner rather than later. So I just wanna stress that it’s a legal issue, lot of people, you know, they’re dealing with a social worker, a hospital or they’re dealing with, you know, somebody that heard something from somewhere, a neighbor, or they’re taking advice about, oh, you can just go out and buy this and then you qualify. Get it from somebody that is a lawyer, because there’s so much misinformation out there, and some people really get in a lot of trouble.
Female2: I just wanna thank all of these ladies so much for coming today. On your way out we’re going to have the tips from the attorneys. Thank you ladies so much for coming.
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