When I Buy a Business, Am I Buying the Debts?
Video Summary
When I buy a business am I buying the debts? Well that all depends on whether or not you are buying the business entity, such as the stock in a corporation or if you are buying the assets. Most of the business sales contracts that I review are a sale of the business assets, so you are not agreeing to pay any of the debts. You simply contract to buy the good will, which is the name of the business, the phone number, the trade name, as well as the business assets; such as the fixtures, equipment and also inventory. Usually with the accounts receivable, if you have those in a business, stay with the seller and so it’s up to him to collect those monies. In an ordinary business transaction you do not assume the debts of the seller.
That is all specified in a contract for the sale and purchase of a business. One of the big assets of a business is a lease, so you certainly need to be sure that you assume and the lease is assigned to you at the time of closing so you do not wind up with a business and not have the lease put into your name. So you would be assuming that obligation.
You also may be assuming obligations if certain equipment is financed; that’s another obligation you would have. However, as far as vendors are concerned, such as your suppliers, then you are not assuming that debt. Although it is a good idea to verify that the vendors will continue to supply you with the product or whatever it is; even if the former owner of the property failed to pay them. That would be an impact on you, but you do not have to pay the debts of the former owner when you only buy the assets.
The utilities are something else that you need to be careful of; also sales tax. You need to make sure that there is no outstanding sales tax that could be a lien against the equipment, as well as tangible property tax.
Now you do assume all the debts of the business if you simply purchase the stock in a corporation. Then you get all the assets and all the liabilities. You need to be careful when you sign the contract to address all these issues.
So if you would like to have me represent you or prepare a contract for the sale of a business well give me a call at 727-847-2288.
- Published in LLC's and Corporations, Videos
How Does a Lady Bird Deed Help My Heirs Avoid Probate?
Video Summary
How does a lady bird deed help my heirs avoid probate?
Well first let’s define what a lady bird deed is. That is a name that an author of a treatise gave to a life estate deed. A life estate deed means that you convey your property to your children or to anyone. However, you reserve to yourself a life estate, meaning that you own the property, or you get to use the property during your lifetime.
Now what is known as a lady bird deed has additional powers besides being able to use the property during your lifetime. Those powers include, which are reserved to you with your life estate is the ability to sell the property without the joinder of these remaindermen. So that is the definition of a lady bird deed when we’re talking about it.
So how does it avoid any kind of probate when a person passes away? Well, you signed the deed and you conveyed it to whomever, your children or your heirs and reserved a life estate. And you have certain rights to convey or transfer the property during your lifetime. But if you do not sell or convey it during your lifetime upon your death all they need is a death certificate and they will own the property, “they” being whomever you have conveyed the property to. And the deed, they will own it, and all they need to do is record the death certificate and they will automatically own the property.
So that’s how your heirs will avoid any probate proceeding if you sign a lady bird deed conveying the property to them during your lifetime.
If you would like to discuss this further well give me a call at 727-847-2288. Thank you.
What Happens to Past Due Property Tax When I Short Sell my Home?
Video Summary
What happens to past due property tax when I short sell the home? Well that’s a fairly easy one. It’s when you short sell your home the property taxes are paid out of closing money and it reduces the amount that your lender receives or agrees to take in satisfaction of their lien and hopefully releases you from any liability on the loan. So those taxes are paid just like any other closing, when you close on your property and sell it to someone else. The back due taxes are paid, since they’re a lien against the real property rather than your personal obligation. So they are all taken care of and it is only up to you to negotiate with your lender that they’ll take the net proceeds less the payment of the real property taxes in satisfaction of the mortgage.
So if you have any questions, well give me a call at 727-847-2288.
- Published in Real Estate, Videos
What Are the Benefits of a Health Care Savings Account?
Video Summary
What are the benefits of a health care savings account? Well this question is probably better asked to your human resources person where you are employed. It’s an alternative to providing health insurance or can be a blended arrangement whereby your employer puts a certain amount of money into your account every month. Therefore, you can use that money for any health care needs you want.
After a certain amount, which is usually a fairly high deductible, then your health insurance would kick in as far as that’s concerned. But you can use this for dental or prescription drugs, anything you’d like as far as your discretionary.
It’s particularly beneficial to people who are very healthy and don’t go to see the doctor very often, other than an occasional physical and don’t get sick, because the money builds up in that account. And so you can use it for cosmetic surgery or dental work or whatever you would like. It’s not particularly beneficial to people who have prescription drugs that are particularly expensive; usually the money that’s deposited isn’t sufficient to cover the amount that the employee has to pay.
So it’s something that your employer does for you or to you in conjunction with providing health insurance for you. So you probably don’t need to call and talk to me about this but that’s my take on a health care savings account. You probably need to talk to the human resources department where you are employed and ask them to give you more information about it. And it’s an alternative to your medical insurance or deductible.
So good luck with that! You can always call me about your legal needs. It’s 727-847-2288.
- Published in Estate Planning, Videos