Revising Your Estate Plan (And Other Must-Dos)
Fall is here! Well, almost. Though it is still pretty hot out there, fall is upon us. After all, most stores have already begun putting out their Halloween decorations, much to spooky-season-lovers’ delight. We’re only a few weeks away from pumpkin spice and horror movies.
With the arrival of this new season, it’s important to make sure that you’ve revised your estate plan, if necessary. In this guide, we’ll talk about why revising is vital, and we’ll give you information on life changes that might require you to add an additional tools to your estate planning toolbox. While the rule of thumb states that you should review your estate plan every three to five years, sometimes, you have to revise it sooner than that time frame.
What Happens If You Don’t Revise?
If you don’t revise your estate plan, this mistake can lead to people being left out. There might be a would-be heir that gets nothing because he or she wasn’t included in your will. On the reverse side, people might be included who shouldn’t be, including exes, individuals with whom you’ve had a falling out, the deceased, and more. It makes everything easier come probate (should your estate have to go through this process) if your plan is up-to-date.
There are several life events that should trigger you to contact your estate planning attorney for a meeting. These include divorce, death, marriage, new births, and illness. We’ll go through each below, giving examples of how they could change your estate plan.
Divorce
Divorce is the legal end of a marriage. It brings with it a lot of challenges, no matter how amicable this split might be (and it’s rarely that amicable). When you and your ex-spouse get divorced, you need to remove him or her from your estate plan. They also need to be removed as a beneficiary from any insurance or retirement policies you may have. When you talk to your lawyer, he or she will help you “scrub” your estate plan to ensure that you remove your ex-spouse.
Death
Death is similar to divorce in that someone deceased also needs to be removed from your estate plan. Though the law won’t recognized dead or divorced parties in certain estate planning documents (it will treat them as void), it’s a good idea to keep your plan updated, so as to avoid confusion and give your estate the best chance possible at moving through probate quickly and efficiently. The deceased, though you might feel more fondly about them than your ex-spouse, need to also be “scrubbed” from your estate plan when you meet with your attorney.
Marriage & Births
On a happier note than divorce or death, marriage and new births mean new heirs and potential beneficiaries. If you’ve welcomed someone new to the family, he or she needs to be added into your estate plan. You don’t want to wait to make this change, lest you pass before you add them and, as a result, they get left out (it happens more often than you think). Act quickly to add new family members into your will and other documents.
Illness
Illness (and injury) is another reason you’ll want to take a new look at your estate plan. There are many documents in an estate plan that deal with illness and end-of-life care, including a:
• Healthcare Directive. This directive informs doctors and nurses of what you want with your care if you are too incapacitated to tell them yourself. Healthcare directives often are deeply personal, including things like a “Do Not Resuscitate” order and more.
• Power of Attorney. You can choose a trusted individual to manage your affairs (financial, healthcare, etc.) when you are too sick or unwell to do so yourself. You choose this person yourself, and he or she abides by your wishes and acts as your agent when making decisions.
• Guardianship. If you are sick and have minor children, you’ll need to appoint a guardian for them, in the event that you pass on. Talk to your desired guardian before putting him or her on the paperwork.
Though your estate plan should include these documents, if it doesn’t, you’ll need to draw them up with an attorney. Even if you have these in place, it is always a good idea to review them to make sure they are correct. As with all of the life changes in this article, you always want to ensure your estate plan is a correct reflection of your life today. Visit our website to reach out and learn more.
The Basics of Cryptocurrency Trustee Service
The numbers show that cryptocurrency is a huge market. No matter how you feel about the prospects of this digital, decentralized, anonymous currency, there is no denying that crypto coins are a huge part of today’s economy. The global cryptocurrency market cap, as of August 1st, 2022, is $1.06 trillion. $112 billion is traded per day, and 65% of coin owners own Bitcoin. A $22 investment in Bitcoin in 2012 is worth $1 million today.
There are upsides and downsides to owning crypto. Advantages include protection from inflation, privacy, no attachment to banks, easy to exchange, and cost-effectiveness. More and more businesses are accepting cryptocurrency as payment. Though the market is volatile, it’s easy to see why many coin owners swear by this form of currency.
More than 300 million people own cryptocurrency, and that means that this digital currency is a big part of estate planning for some individuals. Your estate includes your assets, and crypto is an asset for millions. Because it is an asset, that means that it can be included in an estate plan.
Crypto & Estate Planning Today
The cryptocurrency market is evolving rapidly, and the law is still trying to catch up. Crypto does create challenges in estate planning. The virtual asset is anonymous, and it might not be easily identifiable for heirs. Additionally, Bitcoin transactions require a private key. Each wallet has a private key and public address, but, otherwise, there is little personal information attached to it. Access is not as easy as with other assets (a house or car, for example).
Does that make it impossible to include Bitcoin and other currencies in an estate plan? Not at all. There are even cryptocurrency trustee services, and these services are the subject of this article.
Cryptocurrency Trustee Services
Trusts can own cryptocurrency, and, in fact, it is sometimes recommended that a trust be the primary estate planning tool because trusts afford privacy that wills do not. Wills have to go through probate, a public process. Because cryptocurrency assets are accessible only through passwords, PINs, and other private information, it’s best to keep this sensitive data out of the public eye. In a cryptocurrency trust, the donor transfers legal title to the cryptocurrency to a trustee. At the donor’s request or signal, the trustee transfers the cryptocurrency to the beneficiary.
Here are some things to think about if you have a trust that owns crypto:
• Authority. Cryptocurrency can be considered speculative, which means that it could fall outside of a “reasonably prudent” standard of investment for your trust, should this apply. You’ll need to include language in the trust document that gives your trustee the authority to hold the crypto as a trust asset.
• Choice Of Trustee. Some professional fiduciaries, like banks, don’t allow their employees to serve as a trustee to a trust that holds crypto. If you want to name a fiduciary, you’ll want to interview them about their policies. Always have a backup in mind in case your first choice doesn’t want to take the appointment.
• Access. Make sure that whatever trustee you choose has access to your wallet by telling them what data they need (keys, passwords, etc.) to access the wallet, how to get into it, and where to find it.
• Taxes. Distributions of crypto to beneficiaries will have to be reported on your trust tax return. So, it’s important for your trustee to know how much crypto you have for tax reasons. Keeping a record of when and how you acquired your crypto will assist your trustee in complying with all reporting requirements.
If any of this is confusing, don’t worry. It’s a new field, and the law is still evolving to catch up. Contact an attorney today about setting up a cryptocurrency trust.
What Can A Properly-Designed Asset Protection Plan Accomplish?
Asset protection acts as a safeguard between your creditors and you if you’re going through a divorce, getting sued, or going through some other legal battle. In this litigious society, it is vitally important that you have an asset protection plan, no matter whether you’re an individual or business. The more you accumulate assets and wealth, the bigger a target you are for creditors and other people who might be looking to take your hard-earned cash and property.
What Does An Asset Protection Plan Entail?
This plan consists of legal tools and documents that insulate your assets without running afoul of the law, hiding things, transferring fraudulently, evading taxes, or committing bankruptcy fraud. There are plenty of asset protection tools that an AP plan could entail, including:
• Land Trust. You can hold property in the name of a trustee, thus keeping your name from being revealed in public records. This is more of a privacy tool than asset protection device.
• Living Trust. A trustee delivers your assets to your heirs upon your death, and there are many different forms of these legal tools.
• Corporations. Forming your business as a corporation turns the company into a separate person, at least as far as the law goes. When someone sues your corporation, unless they’re able to “pierce the veil,” it is the business that incurs the lawsuit, not you.
• Asset Protection Trust. An APT holds an individual’s assets and shields them from creditors legally. These trusts provide the strongest protection against lawsuits, creditors, exes, and more.
There are many other asset protection tools; what is seen above is just a selection. Contacting an estate planning attorney will help you put together the right plan for your assets and situation.
What Can This Plan Accomplish?
There are many different goals that having a well-structured, properly-carried-out asset protection plan can accomplish. This plan can achieve your important objectives, and it also:
• Uses the most favorable asset protection laws on the books
• Keeps your property free from attachments and liens, if possible
• Provides privacy and protection for future earnings and accumulated wealth
• Protects against liability that exceeds your insurance coverage
• Enhances your legal negotiating leverage
• Protects retirement savings
• Protects business assets from claims
• Protects accounts receivable from claims
• Insulates rental properties from outside/inside lawsuits
Generally, estate planning is thought to involve only issues of passing property and preserving assets for family members after your death. But, asset protection, which is a part of this general field, deals with the immediate, vital need to protect your assets during your lifetime.
Who Needs An Asset Protection Plan?
Every individual and every business can benefit from an asset protection plan, but there are some who are especially in need of an APP. They include individuals who work in high-risk professions, such as doctors and lawyers. People sue doctors and lawyers all the time, and asset protection can keep these professionals’ assets safe from liability.
Additionally, wealthy individuals might be a target for creditors because they have a high net worth, so asset protection plans offer a shield. Sometimes, APTs are even used to replace a prenup.
It’s important to contact an attorney to set up an asset protection plan. The attorney will be able to maneuver through the legal jargon and technicalities, setting up the plan without legal errors that could make it vulnerable to challenge.
Additionally, going through a lawyer ensures your asset protection abides by the law. There are many laws that prevent concealment and fraudulent behavior, and it is important that you do not run afoul of any of them (or you’ll find yourself with far bigger things to worry about than creditors). An attorney can make sure you toe the legal line, all while getting the most asset protection possible – contact WFP now.
Small Business Planning FAQs
There’s no denying that small businesses are the backbone of America. According to the SBA, there are 31.7 million small businesses in the United States. By the end of 2022, 17 million more will be formed, something that NASDAQ expects will set a record for entrepreneurship. These new business owners likely have a lot of questions, so, in this guide, we will answer some of the most common small businesses planning FAQs in the state of Florida.
Writing A Business Plan
What Should This Plan Include?
According to the SBA, it is vitally important to write down your business plan, no matter whether you’re seeking financing or not. This business plan should include your mission statement, product or service, and information about your employees, location, and leadership team. If you are seeking funding, you should include information about high-level growth plans and other financial must-knows.
Starting A Small Business
What Is An Overview of the Process?
There are a lot of steps to starting a small business, but you should first conduct market research, as that will help you decide whether your idea will be successful in the environment in which you’re starting your company. Then, write your business plan, decide on funding if you’re seeking it, and pick your location.
You’ll want to choose a business structure. There are several from which to pick, and some of the most popular include:
- Sole Proprietorship. This uncomplicated form of business is simple, and, in Florida, you do not need to register it with the state. There is no formal paperwork required to set it up, and it is owned and operated by one person (you).
- Partnership. In Florida, this is created when 2+ people agree to conduct business together in pursuit of a profit, even if the people do not intend to form or do not write an agreement to form this partnership.
- Limited Liability Company. A very common type of business structure, an LLC combines the easy administration of a partnership with the tax benefits of a corporation. In Florida, you get pass-through taxation when you form an LLC. That is one of the reasons this type of business structure is so popular in this state.
- Corporation. This type of business is its own legal entity, and it exists separately from the people who own and operate it. A corporation is considered its own “separate” person, as far as the law goes.
Registering Your Small Business In Florida
For certain types of business structures, you will need to register your small business. It is advisable that you seek the counsel of an attorney to do this, as the attorney will be able to make sure it is done properly the first time, with no technicalities missed.
How Do I Incorporate a Business in Florida?
There are several steps to incorporating a business in Florida, should you choose a structure that requires this process. First, you’ll need to select a new, unique name for your business that no one else has. Then, you should choose the type of business you want and file Articles of Incorporation with the State Department of Florida.
On those Articles, you’ll need a company name, physical address, mailing address, names and addresses of the company’s owners, and an email address. The next step will be to obtain an EIN filing (Federal Employer Identification Number). If you have an LLC and it is a single member, you may just choose to use your social security number for business transactions.
You’ll then want to secure a business/occupational license with your county. This is required by most Florida counties in order to do business. You’ll want to check with your local tax collection office to see their requirements. One final step will be to secure a bank account for your company, as monies entering and leaving the business must go through this account.
If these steps seem overwhelming, they don’t have to be, if you have the right legal help. Contact an attorney today to help you get through the process of starting your business.
Back To School, Back To Reality
While the summer has been fun (and a scorcher, at that), reality is slowly coming back to everyone, as the beginning of school season is, once again, approaching. This new era brings with it some estate planning considerations. The number-one thing on your mind, if you already have an estate plan, should be to ensure that it is up to date and, if necessary, revised.
A lot can change in a short period of time—we all know that. Though the rule of thumb is to edit and update your estate plan every three to five years, big changes might have occurred in far shorter a time frame than that. In this article, we’ll talk about revising your estate plan: the dos, don’ts, and must-knows.
What Does Revising Mean In This Context?
In the context of your estate plan, revising refers to looking over the different documents in your plan to make sure that they are still aligned with your current situation. Are the people listed in the documents still in your life? Have things change with them? In the next section, we’ll discuss the times when revision is the most necessary, though this list is not exhaustive, and there are many other changes that could occur that would make updates a must-do.
When Do You Truly Need to Revise?
Listed below are some major life events that require you to go back and look at your estate plan, ensuring that the plan reflects the current changes, if applicable.
Divorce
Alas, the divorce rate is pretty high, with around half of marriages saying goodbye the legal way. If you divorce your spouse, you will need to go back to your estate plan and ensure that, in the documents, your significant other is no longer listed as a beneficiary or a power of attorney. Even if you two had an amicable split, it’s best to change that role rather than leave it.
Marriage
On the reverse, getting married is a happy occasion to change your estate plan to include your new spouse. You will want them to be a beneficiary or take on important roles in the plan, so this is another occasion where meeting with your attorney would be an excellent idea.
New Family Members
Whether you’re gaining new family members through marriage, birth, adoption, or however else, you’ll want to make sure they are included in your estate plan, if you are close to them. Don’t think to yourself that you’ll get to it “eventually”—do it now, lest something happen, leading it to be too late.
Role Change-Ups
Almost every estate plan has roles delegated to other people, including powers of attorney, guardians, and executors. These roles are vitally important to the administration of the plan, and you want to continuously make sure that the person you’ve asked to carry out that role is still fit.
If illness, addiction, or injury, for example, have rendered your named power of attorney incapacitated, you’ll need to remove them from that role. If you’ve divorced your spouse, but they’re still executor of your will, you’ll need to make alterations. If your proposed designees are of sound mind and still close to you, they, obviously, can stay.
What Happens If You Ignore Your Estate Plan?
A whole lot of conflict, that is what can happen. In addition to people being left out or included who should not be, families can challenge wills post-mortem, leading to expensive inter-family strife. For your loved ones’ sake, it is important to keep up with your estate plan.
Hopefully, this short guide has inspired you to contact your estate planning attorney to look over your plan again. And, lest we forget, we hope you have a great start to the upcoming school year!
Estate Planning for Cryptocurrency
In this article, we will discuss estate planning for cryptocurrency. While this guide will not be the be-all-end-all to planning for this digital currency, it will cover some important fundamentals, including definitions, strategies, advantages, and disadvantages.
What Is Cryptocurrency?
If you’ve been following the financial headlines over the past decade or two, then you’ve probably seen information about cryptocurrency pop up. This digital currency is a medium of exchange, but it is unique because it does not rely on a bank or central authority to govern it. It is decentralized and largely unregulated. The crypto market can be volatile, but it can also be quite lucrative. It is easy to see why people who are not afraid of risk-taking invest in this digital asset.
Advantages & Disadvantages of Cryptocurrency
As with any financial instrument, cryptocurrency has its benefits and downsides. Its “pros” include:
- Accessibility. Anyone can buy this liquid currency, so long as they have the funds. Some coins even allow you to purchase currency in fractions.
- User Anonymity. If you want, for whatever reason, to remain anonymous, the crypto blockchain allows you to do so. This anonymity is a big draw for a lot of people who value their privacy.
- No Central Authority. Crypto is not tied to any bank or government, and it is totally decentralized.
- High Return Potential. The flip side of the market’s volatility is that coins worth a few cents one day could yield hundreds, if not thousands, of dollars the next.
But, crypto also comes with “cons” to consider, such as:
- High Loss Potential. There are two sides to that aforementioned volatility, and purchasers of crypto might suffer extreme losses in just a matter of moments on the market.
- Limited Use. When compared to cash, credit/debit card, and bank transfer, cryptocurrency is far less accepted at major vendors.
- No Government Regulation. While some might appreciate the lack of oversight, others are wary about crypto’s freedom from government regulations.
Do Estate Plans Cover Crypto?
Estate plans can cover cryptocurrency, as well they should. After all, it is an asset you own that you may want to hand down after you die. Plus, the market is constantly shifting, so who knows how much value your coins could have one day? Some people do believe crypto is the future of payment (while others, obviously, disagree).
The nature of crypto (and NFTs, for that matter) can make it difficult to place into a traditional estate plan, though the laws are still evolving. Keeping a digital legacy, regardless, is important. This organized, updated list contains information about your digital assets, including quantity, type, passwords, keys, and information that a fiduciary would need to access your crypto.
It is currently difficult to put your crypto assets in the name of a revocable/irrevocable trust. But, you can still include this currency in your will. It will have to pass through probate, however. The most important thing to note when it comes to this digital currency is the ability to track it. Your executor cannot execute your will if they do not have information on how to access your coins.
Challenges In Estate Planning For Crypto
The unique nature of this currency brings with it a lot of challenges. Trustee companies tend to know little about cryptocurrency, according to Bloomberg, but estate planning attorneys are likely to be more knowledgeable. Because there isn’t much personal information associated with crypto and it requires a private key to get in, this asset must be handled differently than others.
If you are thinking of investing or have already made investments into cryptocurrency, it is important that you talk to an estate planning attorney, if you haven’t already. You will want to protect this asset the way you do your other holdings, in order to keep it available to your heirs.
Personal vs. Business Asset Protection
In this article, we are going to talk about two different categories of asset protection. Though there many different types of asset protection, we’ll be looking into the nature of the asset: whether it is personal or business-related. This distinction matters, as far as legal tools, planning, and taxes go.
To start, we’ll look at some definitions.
Terms To Note
Personal assets are items of present or future value that are owned by an individual or a household. Some common examples of personal assets include cash and its equivalents, checking and savings accounts, CFDs, physical cash, Treasury bills, money market accounts, and more. These assets are not owned by a company, corporation, or “entity.” They belong to a person or a household.
Business assets, by contrast, are items of value that are owned by a business, company, or corporation. These assets deliver value to the business, as they are used for functions such as funding operations, driving growth, and producing goods or services. Examples of business assets include machinery, raw materials, inventory, patents, royalties, and other intangible items, and intellectual property.
Asset protection is a term that refers to the goal of guarding your property from creditors, taxes, and other judgements. This set of legal techniques follows a body of common and statutory law. The goal is to insulate your assets, all while following the letter of the law and staying miles away from tax evasion or perjury.
Personal Asset Protection
Now that we’ve covered the definition of personal asset protection, it’s time to look into the various legal tools and techniques that can be used to insulate your personal property. These include:
- Homestead Exemptions. A homestead exemption helps people save money on property taxes every year. In Florida, everyone with title to property (equitable or legal) is eligible to receive a homestead exemption up to $50,000. The first half of that $50,000 is applied to property taxes. This removes part of your home’s value from the overall taxation, appraising it as though it were worth a good deal less.
- Certain Types of Trusts. Asset protection trusts are three-party relationships that hold a person’s assets to shield them from creditors. APTs are self-settled in Florida if the person who creates the trust is also the trust beneficiary.
- LLCs. A Limited Liability Company is a mix of partnership and corporation. It is a business structure that has the same pass-through taxation as a partnership/sole proprietorship, combined with the limited liability of a corporation. Individual business owners can classify their companies as LLCs to protect personal assets.
Though this list is by no means exhaustive, those legal tools are common ways that people protect personal assets from creditors. Likewise, there are several techniques that can insulate business assets.
Business Asset Protection
There are many ways to insulate your business assets. Some of these include:
- Business Type. There are several different types of business structures in Florida, and each has their own role in shielding a business owner. Deciding how to classify your business can help protect your assets in the long run in the event of lawsuits or creditors.
- Insurance. Insurance is a good idea, no matter whether you are a business or individual. This failsafe protects your company if there is a lawsuit, disaster, or other problem. When it comes to insurance, don’t be afraid to splurge on an expansive policy. You never know when you might need it.
- Equity Stripping. Another possible way that businesses can protect their assets is through equity-stripping. This process removes the equity/value of an asset, making it unappealing to creditors. This is usually done via a separate company so that the overall assets remain the same. Once equity has been stripped, creditors cannot attack as easily.
As always, the best plan of action is to talk to a lawyer to ensure that your personal and business assets are as protected as possible. Legal counsel will be able to guide you in what tool to pick based on the facts you give them. Contact our attorneys today.
July Is An Unlucky Month For Weddings
If you’re currently in a state of newlywedded bliss, this article might not be for you, as it is going to be a huge bummer. Let’s face it: the stats on marriage don’t look too great. The divorce rate is 44.2%. This means that if you know ten couples, four probably won’t make it. Some say that January is the most common month for divorces, while others say that it is July or August. Some even claim it is March (perhaps after Valentine’s Day’s pink-and-red haze wears off).
Whatever the month, there’s no denying that divorce is a real thing. In this article, we’re going to discuss divorce and its impact on your estate plan. If you feel, for whatever reason or inkling, that this information applies to you, read on.
What Is Divorce?
A divorce is the end of the legal contract known as marriage. When a court issues a divorce decree, that signals that your marriage is officially over in the eyes of the law. Divorce can take months, if not years, to finalize. According to experts, a breakdown of the marriage (arguing, lack of commitment, infidelity, etc.) is usually the biggest reason for a divorce.
Divorce And Your Estate Plan
Divorce might change your relationship with your ex, but it does not automatically take your ex-spouse off your estate plan as a beneficiary. Chances are, unless you saw a split coming from a mile away, your ex is in your estate plan as a beneficiary. If the divorce decree contains a stipulation to change your beneficiary designation, that’s one thing. If it contains no such clause, you’ll need to talk to an attorney.
With a lawyer, revise powers of attorney, trusts, wills, and other documents with your ex-spouse in order to move forward. You don’t want to leave any stone unturned, and that is why it is important to sit down with a lawyer and go through your estate plan document by document.
What Does The Law Say?
In Florida, the law provides that a provision of a will that affects the ex-spouse of a married person is void upon divorce, annulment, or dissolution of the marriage. The divorce will not invalidate the entire will, though it does remove the spouse as a personal representative or beneficiary. It treats the spouse as though he or she has died and therefore cannot inherit or execute.
Keeping this in mind, most lawyers agree that after a divorce, someone in Florida should not just rely on this law to cover them. Go through your estate plan and ensure that the documents officially have your ex-spouse removed. Neglecting this task will cause awkwardness at best. At worst, your ex-spouse might get a benefit from your estate when you really don’t want him or her to.
Protecting Assets From An Ex
Along this same line, you might be in a position where you want to protect assets from an ex. There are different financial tools that can help you with this, such as trusts, retirement accounts, and more. The bottom line is that divorce law and estate planning law often find themselves tied together. You don’t want to navigate this process without a lawyer. You might find yourself missing something important or getting an unfair shake from opposing counsel or the court.
During the turbulent time of divorce, we understand that estate planning is likely the furthest thing from your mind. Some divorces are a terrible, heartbreaking tragedy. Others inspire less-negative emotions. No matter where you are on this spectrum, it’s important to contact WFP‘s legal counsel immediately to ensure your estate plan is updated after the marriage ends.
Cryptocurrency Trustee Services: How Does It Work?
If you’ve seen the news, whether tech, political, or otherwise, within the past few years, chances are that the word “cryptocurrency” has popped up on your feed. Cryptocurrency is a type of decentralized coinage. This digital asset is not reliant on a bank, government, or other central authority. Though cryptocurrency has its naysayers because of its volatile price and fluctuations, it seems that this digital asset is here to stay.
No matter whether you’re mining Bitcoin, Litecoin, Ethereum, or any other major, minor, or exotic coin, cryptocurrency can have an impact on your estate plan. It is, after all, an asset, and it therefore falls under the umbrella of estate planning. In this article, we’ll discuss cryptocurrency trustee services and how they work.
Can Cryptocurrency Be Placed In A Trust?
A trust is a tri-party fiduciary relationship. The donor, also known as a grantee, transfers title of an asset to a trustee. This second party holds the asset for the beneficiary of the third party, also called the beneficiary. At the donor’s authorization, the trustee eventually transfers title to the beneficiary.
Though you might think of a trust as holding only cash or property, cryptocurrency can be placed in a trust. This has a lot of benefits. Namely, your cryptocurrency will not be subject to an expensive, complex probate process if you pass away.
Some Upsides To A Crypto Trust
Before discussing who administers a trust, it is important to talk about why putting cryptocurrency into a trust could be a good idea. It’s understandable why some crypto holders might be wary. After all, they’ve chosen a decentralized currency for a reason. That said, here are some of the upsides to a crypto trust that you should know:
- Lessens Risk Of Loss. How do you access your cryptocurrency? Chances are, you have a wallet, password, key, and other digital safeguards that come with owning this type of asset. When you die, who knows these safeguards? If you put your crypto into a trust, there is a lower risk of it being lost after you die, as other people will have necessary information.
- Privacy. In addition to avoid the hassle of probate, a process that can cost your beneficiaries time and money, a trust allows you to keep your crypto private. It isn’t going through probate court, so hackers and scammers won’t catch wind of it. Everyone knows about high-profile crypto hackings, and you don’t want to give these cybercriminals any reason to latch onto you.
- Helps Beneficiaries. Your intended crypto recipient(s) won’t have to access and manage your Bitcoin or other crypto before it’s their time to do so. This relieves them of a rather immense burden, and a trusted individual with far more experience, such as a trust services company, will take over the reins. According to CNBC, 10% of people have some type of digital asset. So, companies and individuals have emerged that handle trustee services for cryptocurrency.
Trustee Services
A trustee can be an individual, corporation, or other custodian. A trust company is a business tasked with the management, administration, and eventual asset-transfer to the trust’s beneficiary. This company acts as a custodian, and, though it can be nerve-wracking to give up control of your crypto to a company, there are some good reasons to go with a service, as opposed to appointing an individual (family member, friend, etc.).
Benefits of Trust Service Companies
These companies can provide a lot of services to their clients from one central location. This saves a lot of time and effort, as clients do not have to coordinate financial assets, broker information, tax advisors, financial planners, and other services. These companies do charge fees, but their experience in protecting assets and managing investments makes them an attractive choice for some grantors.
If you own cryptocurrency, talk to an attorney about setting up a trust and potentially working with a trust services company. Our attorneys can help answer any questions or concerns you may have about the process.
Corporate Formation FAQs
In this article, we will discuss the set steps to forming a corporation in Florida. A business law attorney can help you with anything you need, as they are experienced in this field. Listed below is a brief overview of the steps for forming a corporation.
How to Form a Corporation in Florida
1. Choose the Name
Your corporation’s name has to include “Corporation,” “Company,” or “Incorporated,” as well as their applicable abbreviations. Additionally, the name has to be different from other businesses that have registered with the Department of State. You can check the Division of Corporations business name database, accessible at http://search.sunbiz.org/Inquiry/CorporationSearch/ByName, to make sure your name is unique. FYI, you cannot reserve a name ahead of time.
2. Prepare/File Your Certificate
This is where you might need the help of an attorney. In order to legally create your corporation, you have to file Profit Articles of the Incorporation with Florida’s Department of State Division of Corporations. You can file the articles online or via the mail. The articles must have:
- The corporation’s name
- Principle office street address
- Purpose
- Number of shares the company can issue
- The names/addresses of initial directors and/or officers
- The name, signature, and address of an agent that gets service of process
- Name/address of incorporator
3. Appoint Your Corporation’s Registered Agent
All corporations in Florida have to have agent for service of process, and that individual or company has to be listed on the articles. This entity accepts legal papers on behalf of the corporation in the event it is sued. The registered agent can be a human being, or it can be an entity authorized to conduct business in Florida. Prior to designation, the agent has to agree to accept service of process for your corporation.
4. Create Bylaws
These internal corporation documents set out the basic ground rules about how to operate your corporation. You do not file bylaws with the state, and there is no legal requirement to have them. That said, it is a very good idea to have corporate bylaws, as they set your corporation’s operating rules on paper. This shows creditors, banks, and the IRS that your corporation is legitimate. There are plenty of sample bylaw forms online.
5. Appoint Directors/Hold Meetings
Directors are appointed when you name them in your articles, and the person must appoint them after you form the corporation. These directors are on your board until shareholders’ first meeting. After this first meeting, directors should do the following, if applicable:
- Appoint corporate officers
- Select a corporate bank
- Adopt bylaws
- Authorize issuance of stock shares
- Adopt an official stock certificate
- Adopt a corporate seal
- Set the fiscal year
- Record these actions in fiscal minutes
6. Issue Stock
Next, the corporation can issue stock to shareholders in exchange for shareholders’ contribution of cash, property, and/or services. Small corporations issue paper stock certificates, and you’ll need to enter the shareholder’s contact information and full name into the transfer ledger. In Florida, corporate stock’s default is no par value. But, if you want to establish par value, you can. Again, this is a step that would be best carried out by a business attorney, as the law can be somewhat complex.
7. File an Annual Report
In Florida, if you want to maintain an active status, your for-profit corporation has to file a yearly report. The report’s first version is due the year after you form your corporation. File online between January 1st and the first of May. Reminder notices will be sent to the email address you have provided to the State.
8. Get an EIN
An EIN is an Employer Identification Number. This federal number is mandatory. You can get an EIN by filing an online application on the IRS website, for which there is no filing fee.
We strongly advise that you contact a business law attorney to help you form your corporation, as they law can be difficult for laypeople to maneuver.