Do You Need an LLC for Your Real Estate Business?

As an independent real estate agent, there’s no doubt you have a lot on your plate. Thinking about your business structure may be the last thing on your mind, but it actually should be somewhere on top of your to-do list. The good news is that once you set up your structure, you can rest easy knowing your business and assets are organized appropriately.

 

Why Consider a Corporation or LLC for Your Real Estate Business?

Just because you belong to a brokerage does not mean you are organized in business formation sense. Your brokerage gives you a 1099 at the end of each year, not a W-2, so you are considered an independent contractor. This means that in the eyes of the government, and more importantly, the courts, you are the sole owner of your own real estate business.

This really comes into play if there are ever any legal actions taken against you. A buyer might sue you, claiming you misrepresented them in the purchase action of a property. Or a seller might claim damages saying that your marketing methods or failures caused a loss of money on the sale. If these things happen, and your state real estate commission allows you to sign contracts in your entity name vs. your broker’s name, then you alone are responsible. In an un-incorporated business structure such as a sole proprietor, your personal finances, retirement accounts, and even your home could be on the line to pay off damages.

This is why many independent real estate agents consider incorporating or forming an LLC for their real estate business. Many benefits can be gained, and one of the most important is that your personal property is not considered accessible for business claims or losses.

 

Benefits of a Real Estate LLC or Incorporation

The benefits of choosing to incorporate your real estate business or form a real estate LLC structure extend beyond personal financial protection. Here are some other important benefits of choosing an LLC or corporation for your real estate practice.

• Tax Savings. One advantage of forming a real estate LLC is tax savings. As an LLC or s corporation, you can choose S-Election on your tax form. This will give you important exemptions in self-employment tax that are not available to sole proprietors or partnerships. In fact, many independent real estate agents and investors find real estate LLC tax advantages to be one of the most valuable aspects of incorporating.
• Positioning for Success. You’ve heard of “dressing for success,” but what you may not know is that choosing to form a real estate LLC or corporation can position you for success. Many agents find themselves more active and self-reliant after they incorporate because they take their business more seriously, and become more organized by keeping their personal and business affairs separate. In addition, when you let your customers know you are incorporated yourself, you gain an added layer of credibility, which could potentially lead to more listings and sales.
• Additional Credibility and Brand Protection. Your profession has many designations that carry prestige: GRI, CRS, etc. and when you have LLC or Inc. after your name, you will gain instant credibility with clients and this could potentially lead to more listings and sales. In addition, once you incorporate with your name in your state, nobody else can use that business name to incorporate.

 

Other Considerations

There are a few common steps that many independent real estate agents take after they incorporate or form an LLC:

1. Obtain anEmployer Identification Number (EIN) from the IRS. Click here for more information about obtaining your EIN.
2. As a way to maximize tax flexibility and savings, most independent real estate agents who incorporate themselves fill outIRS Form 2553 with an S-Election and send it in to the IRS.
3. Once you have your Articles of Incorporation / Organization and EIN number, most independent real estate agents who incorporate themselves open aseparate Business Bank Account to keep their personal finances separate from their business finances. Many banks have promotions that provide incentives to open up new accounts; so it pays to shop around.
4. Most independent real estate agents who incorporate themselvesupdate their W-9 Form with their broker indicating their new entity name and bank account. Some brokers require additional forms to change your status. Ask your broker what you need to do to make this transition.
5. If your state allows you, most independent real estate agentstransfer their personal real estate license into their new LLC or Corporation. It is important to check with the regulatory board or commission that awarded you your real estate license about any restrictions, qualifications, and fees.
6. Additional Filings and Fees: The Secretary of State Division of Corporations of every state charges a fee to incorporate or form an LLC. They can range from $40 to $550. Most state fees for setting up a legal entity are below $200. Contact us for state specific pricing.

Nebraska has what is called a “biennial report” filing requirement. This is a form you submit to the every other year to confirm that your entity is still in business, and confirm who owns the entity.

Nebraska Real Estate Commission or Boards may also has a fee required to verify your license is active when you establish your company and every year following.

The post Do You Need an LLC for Your Real Estate Business? appeared first on Boyum Law.

from WordPress http://ift.tt/2klnEsE
via IFTTT

Hello world!

Welcome to WordPress. This is your first post. Edit or delete it, then start writing!

from WordPress http://ift.tt/2iK8MUJ
via IFTTT

Bradley Boyum interviewed by Steve Sleeper

Recently I got a chance to appear in Ask the Expert, a podcast by Steve Sleeper. Steve is a noted radio host who interviews experts from various professional areas. In this brief interview, Steve and I talk about the importance of estate planning. Some of the things I touch on are how estate planning helps you to avoid stress of going to court over an estate, make your intentions regarding your assets clear, and ensure appropriate long-term care. Since I believe very strongly in the importance of these, I am grateful for this opportunity to speak to Steve and his listeners.

I hope you enjoy the interview and find it helpful.

Click here to listen

 

The post Bradley Boyum interviewed by Steve Sleeper appeared first on Boyum Law.

from WordPress http://ift.tt/2hwtOlz
via IFTTT

5 Steps to Remove the Facebook page of a deceased loved one

Probate is a very stressful process on many occasions. In my daily dealings helping clients go through the process of probate here in Nebraska, it is very common to have to deal with a Facebook page. More specifically, take down or deactivate a Facebook page.

In this installment of my discussion about dealing the Facebook page of a deceased loved one, I have detailed the steps to take to deactivate that person’s Facebook page. Below are the 5 specific steps to follow in order to cancel or deactivate the Facebook page of a deceased loved one.

 

1.  Go to http://www.facebook.com

Click on the drop down arrow on the top right of your Facebook homepage.

 

 

2. Click on the Help button on the lower right corner of the log in page.

 

 

3. Type the word deceased in the area that reads “enter a keyword or question”

You will notice that a number of choices appear when you search deceased on the help screen. In order to delete or deactivate a loved one’s account, you must select the second choice.

Click on: “How do I request the removal of a deceased family member’s Facebook account?” and you will see the following screen.

 

4. Click on the “send us a request” link, and it will bring you to following screen.

On the screen, you will notice a brief discussion of the information needed to process the special request. Notice the discussion does not include any location to send the information. The entire request is done through the Facebook website. To reach the screen needed to submit the information click on “send us a request” on the second to last line of text on the screen.

5. Enter all of the necessary information in the appropriate places.

The attachments that I send with my submissions are the Letters of Personal Representative and the Death Certificate. You attorney will have both of these documents in electronic form.

 

 

The post 5 Steps to Remove the Facebook page of a deceased loved one appeared first on Boyum Law.

from WordPress http://ift.tt/2getTt8
via IFTTT

7 Reasons Why Someone Would Need an Attorney Like Me

Recently, I got an opportunity to speak at the Big Red Referral Group’s lunch. This is a great group of professionals with different backgrounds, and I was the only estate planning attorney in the room. Because this was during the National Estate Planning Awareness Week, I decided to make my presentation really broad, that is, offer an introduction to estate planning. Most people know what estate planning is, but, unless they do estate planning for a living, they may only be aware of the area of estate planning that is relevant to their life. That may be naming a guardian for their new child, going through probate when their spouse passes away, preparing a will for their children, depending on where they are in life. So I decided to paint a more complete picture of estate planning by discussing seven common reasons why people hire someone like me.

 

1. Recent Parents or Recently Divorced

Going through someone’s life, the most common early-stage reason to get an estate planner is to prepare a will when a couple has a child. They generally don’t have a will when they first get married. Then when they have a child, they name a guardian for the child in the will, most commonly. That’s the first step.

Then the next one is – and I don’t mean to pair these two – is divorce, which is generally the next life event that happens, if it happens. At that point, it is necessary to adjust the estate plan. The kids might remain the ultimate beneficiaries, but beneficiary forms if there’s no trust. A lot of times you name your life partner or your spouse as a personal representative, so that will likely need to change.

2. To stay in control of your assets after you are unable to make decisions

The next reason to hire an estate planner as you go through life is to stay in control of your assets if you’re not able to make your own decisions, whether you’re still alive and just unable to make your own decisions or you passed away and your assets are being transferred to someone who maybe doesn’t have the mental capacity to handle it or they’re minors.

That’s a stage when you need a trust. Really, all a trust document is a written description of how you want your money spent and when you want it spent if you’re not there.

3. Privacy is important to you

The next most common reason is privacy. A will is a public document. When someone passes away you file an inventory, which is literally a list of everything that someone owns. When you have a trust, it’s a little easier to hide what you actually own. In Nebraska, there is a state-level tax, which takes away some of the privacy, but, for the most part, you can keep the specifics of what you own hidden if it’s planned in advanced. This does not necessarily mean the dollar amount of what you have, but the specifics of what makes up that dollar amount.

4. To inventory or organize your assets

A big thing that people are relieved about after I set up an estate plan for them is not needing to organize their assets any more. That organizational aspect alone is very valuable: Everything is organized. It’s in one spot. They know where everything is. They know if they’re missing something. A lot of times, as strange as it sounds, people will forget about bank accounts or forget about money. One of the first documents I give potential and current clients is a laundry list of types of assets they might have. I’d ask them to go through it and find everything. It’s surprising how often people find a forgotten bank account or a savings account, which is perhaps the most commonly forgotten asset.

5. Need help with Medicaid planning

Medicaid planning is a fairly prominent area of estate planning now, so people often need help with that. It’s very common in my practice and deserves a separate discussion.

6. Business Owner

S Corporations, which is a tax classification for businesses, are not allowed to be held by an estate. Business owners often don’t realize that. Because a true S Corporation cannot be owned by an estate, it causes problems when the owner passes away. If the corporation is set up incorrectly, it causes some issues with how fast you either have to sell the business or try to change the business entity type. This is another very common scenario in my practice. Fortunately, with an LLC, this is not a problem.

7. Probate

Probate is a very complicated system. There’re probably 150 steps that you need to go through to actually complete a probate. I had two clients recently who needed help with closing an estate that has been open for several years. They tried to do it themselves, but they couldn’t figure out how to close the estate, which is a point where all of the taxes are calculated and you actually distribute property.

After they retained me, they were high-fiving in the hallway as they were leaving my office – literally! It was it was incredibly rewarding to see them so excited and relieved. That’s an example of the situation where probate sounds easy, but it is not. I love helping clients dealing with this issue.

The post 7 Reasons Why Someone Would Need an Attorney Like Me appeared first on Boyum Law.

from WordPress http://ift.tt/2eIWwPj
via IFTTT