What Steps Should I Take If I Want To Buy A Business?
Video Summary
What steps should I take if I am considering buying a business? Be very careful. (a) whenever you buy a business or are considering buying a business, first thing that I ask the people is whether they’ve had any experience in a particular business so that they know what they’re looking for and that every business is unique.
I know particularly the restaurant business or the delicatessen business, the bar business, there’s all sorts of things that unless you’ve been there you don’t have any ideas of what the problems could be as far as a business is concerned and that’s true about any business. So if you don’t have any experience and a going concern be very, very careful.
You need to hopefully work in the business for a period of time so that you can get the expertise and know any problems that are associated with it. So that is huge as far as (a) having the expertise as far as running the business once you purchase it. Also, you need to be sure you review the books and records of the business and do a due diligence as far as that’s concerned.
You need to be very concerned about key employees, making sure that they don’t leave and there goes your book of business as far – whatever business it is and they go out on their own if there are key employees.
So you need to, whenever you locate a business you need to then prepare a contract which will give you the opportunity to exercise due diligence and if you would like to come in and speak to me about what all you need to do to buy business I’ll be happy to discuss it with you and work on preparing the contract but a lot of it has to do with your area of expertise and your ability to know what to look for in any particular business. If you have any questions give me a call at (727) 847-2288.
- Published in LLC's and Corporations, Videos
How Long Does Probate Take?
Video Summary
How long does probate take? Well it doesn’t take six years and the lawyers don’t wind up taking 80 percent of the money and the government taking the other 20 percent, so the beneficiaries get nothing.
The usual time period or, in fact, the judges require probate administrations be closed out in a one-year period or the lawyer who is handling the estate needs to give an explanation to the court as to why the estate is still open after one year.
There is a short form of probate called a summary administration that can be used and a probate administration can be concluded in approximately 30 to 45 days or even sooner than that. That’s if you have assets of less than $75,000 which would exclude the homestead property and that there’s no creditors. Then you can file for a summary administration and have the assets passed to the heirs.
If you have creditors or other problems, different assets, multiple beneficiaries and have to open up a formal administration with assets in excess of $75,000 or any number of creditors that’s called a formal administration and in a formal administration you have to run a notice of creditors, and that creditors period runs for three months from the date the first publication in the newspaper is published, and so the estates usually will be open from four to six months.
Now a lot depends on the beneficiaries. If the beneficiaries want to fuss about this and start being hard to get along with or they don’t agree, i.e. a non-functional family and want to fight about it, well, all bets are off as far as how long it’s gonna take to resolve the estate.
One of the other things that’ll keep an estate open is this real estate market and trying to liquidate real estate, and that’s another problem, or dealing with various assets, or even recovering all the assets also takes some time.
So there’s any number of factors that go into the time period in order to probate an administration, probate an estate, so but the rule of thumb is if you have a formal administration you’re probably looking four to six months. If it’s a relatively simple estate it should be closed out in a year.
If the parties want to fuss and sputter about it well then you’re looking at spending a lot of money and the lawyers will take all the money while the parties want to fight over furniture and pots and pans or – and so it’s not good when we fight. So if you have a functional family it should be wrapped up and board at 12 months. If you have a question about probate please give me a call at (727) 847-2288, thank you.
Do You Understand Your Trust?
Video Summary
Do you understand your trust? I would suggest that probably you understood your trust whenever you signed it, but if you’re quizzed about your trust three or four weeks or certainly a year later, you probably don’t understand it because it’s about 16 pages or longer, and that’s a lot of stuff in it that the lawyer knows about, but you don’t necessarily understand, other than what you remember about the trust, and so I would suggest that you probably don’t understand your trust, but I do suggest that you maybe read it, review it and maybe contact a lawyer to have him review it with you to make sure that it accomplishes everything you would like to have done, particularly as far as whenever you pass away that it goes to who you want it to go to in the manner you want it to go to, and if you have a spouse involved, that the spouse either has flexibility as far as changing the trust after your death or, if you don’t want them to have any flexibility, many times trusts, as well as wills, but particularly with trusts, if they’ve been drafted for eight or ten years and they haven’t been revised, there’s provisions on how they set up an irrevocable trust at your death for tax purposes, and that has some real problems whenever you have an irrevocable trust, particularly for a spouse, which was not giving the spouse any flexibility.
Also, there’s a lot of confusion as to the ability to amend trusts, change joint trusts after one of the joint settlers or grantors of a joint trust passes away. So I urge you to dust off your trust document, look it over, and if you’d like, give me a call and we can sit down and go through your trust. And first I’ll ask you what you’re trying to accomplish; and, two, then we’ll review it to see if it does what you want it to do, and we’ll point out any irregularities or problems with it as far as what it accomplishes.
So if you’d like for me to review your trust, give me a call at 727-847-2288. Thank you.
What Is A Balloon Mortgage?
Video Summary
What is a balloon mortgage? That certainly is a strange word to use, but it is a legally-defined term, and it means a mortgage brand or is a payment that is twice the amount of the regular payments that are paid.
Best way to illustrate this is let’s say that you have a $100,000.00 mortgage, and you set the payments out so that it would be paid out over a period of 30 years. So let’s say the payments are $500.00 a month, and we won’t go into the interest rate, but you pay $500.00 a month for five years, and then the note says it becomes due and payable in five years.
Well, you haven’t paid off the $100,000.00 in the five-year period so after five years you’ll still be owed probably $60 or $70 or $80,000.00 on the $100,000.00, and that’s called the balloon payment.
So that’s the illustration or an example of a balloon payment, which is whenever you have regular periodic payments, and then you have a very large payment that becomes due and payable. Most of your commercial mortgages these days also set up a balloon payment. They spread your mortgage payments out over a 15- or 20-year period, but they say the loan becomes due and payable after three or five years, and certainly if you have investors involved, that can be the case with residential property whenever you have owner financing.
If you use a balloon mortgage on a residential property, and it’s a second mortgage, then the statutes provide that you must have certain bold-faced language at the top of the mortgage and also above the signature page indicating this is a balloon mortgage and setting forth the amount of the balloon payment, and that’s so it’s basic consumer protection type situation so someone can’t say, “Well, oh, I thought I’d have this thing paid off in five years.” Well, if there’s a principal balance above where you sign it, well, you’ve got to sort of be blind in one eye and can’t see out of the other if you can see that the principal balance is not going to be paid off when the loan becomes due and payable since they set forth a balloon payment. There are some penalties if this language is not on the second mortgage on a residential transaction.
So that’s a balloon mortgage. If you have any questions about it, well, give me a call at 727-847-2288. Thank you.
- Published in Real Estate, Videos