Editor's note: Lisa Lehman is off this week, so we are sharing one of her columns from February 2011. Enjoy! My father, a widower, recently passed away. He had a will that gave all of his estate to me and nothing to my sister. She has been a crack addict for years and refuses to get help for  her addiction. She flunked out of college and has never held a job. My sister also was very mean to my father.  In his will, he actually listed these reasons to explain why she wasn't getting anything.  These are very private family matters.  I 've been told that anybody could go to the probate court and…

Lisa, I own a small technology company that is finally starting to grow and flourish. My concern is whether I can legally manage my company in a way that will allow it to thrive and successfully compete with other technology companies. Do you have any suggestions? Thank you, Boris Dear Boris: Running a company involves both legal and business considerations. So your concern is justified. In addition to being an attorney, I also hold an M.B.A. (Masters in Business Administration) degree. The combination of these qualifications allows me to provide more comprehensive and strategic advice to …

Editor's note: Lisa is off this week, so we are sharing one of her columns from April 2011. Enjoy! My mother is in her late 70s. Because her health is starting to fail, I put her assets jointly into her and my names. That way, I can help her manage things if she develops dementia or some other illness. I have always understood that this was the best way to handle this type of situation Can you tell me more about holding assets jointly?  Thanks, Lisa – Alex Hi Alex! It's true that you would be able to manage your mother’s assets if she became ill. People often put an elderly parent’s assets …

Hello Lisa, I have a will that is almost eight years old and I am not sure whether I should do a new one or not. Is there a general rule regarding how often someone should update their will?  Thank you, Brad Dear Brad, There is no general rule, but an eight-year-old will most likely requires updating. It is wise to take a look at your will every year or so. Your financial and family circumstances probably have changed over the years, and it is important to make sure that your will reflects your current wishes regarding who will receive your assets upon your death. Here are some of the more …

Editor's note: Lisa Lehman is off this week, so we are sharing one of her previous columns. My elderly mother recently passed away. She had absolutely no quality of life, and was on life-support for almost three months.  How can I ensure that this does not happen to me?  I don’t want to be a burden on my family. Thanks in advance for your response. — Susan Hello Susan, I am very sorry to hear of the loss of your mother. Please accept my condolences. Losing a parent is probably one of the most difficult times we face in our lives. It's just this type of situation that often causes people to …

Lisa, some friends and I are opening a new business and want to form an LLC.  We are not sure what our options are for managing the business. Could you explain how to form an LLC and how its business could be managed?  Thanks, Suzanne. Dear Suzanne, The LLC is formed by filing “Articles of Organization” with the Illinois Secretary of State. You can usually file the Articles of Organization online. The Secretary of State has detailed instructions that you can find on its website at http://www.ilsos.gov/llcarticles/frontinstructions.html. One of the most important requirements is that the name …

Editor's note: Lisa Lehman is off this week, so please enjoy this column that previously ran on Patch.   Lisa, My brother wants to borrow $5,000 from me. We are very close and I trust him. However, I think I should get something in writing in case he doesn’t pay me. What do you suggest?   Thank you.  -  Nancy    Dear Nancy:        You must be very careful when you loan money to any person, including family members. I have seen too many families become estranged over loans and other money issues. From a practical standpoint, you should first find out why your brother wants to borrow money from…

I don’t have a will because I never thought I needed one. I am single and don’t have any children. So why should I bother doing a will? — Anthony  Dear Anthony,   Thanks for your question. It raises considerations for people with many different types of family situations and life circumstances.  A will is a legal document that tells everyone in the world who you want your assets (your money and property) to go to when you die. Remember, there are two certainties in life – death and taxes!  If you die without a will, the law of the state in which you live will determine who receives your …

Lisa, I loaned a former friend $5,000. He signed a paper acknowledging the amount of the loan, the interest rate, and the due date for repayment.  The loan is now past due and he hasn’t repaid me. How can I collect this debt without spending a lot of money on attorneys’ fees?  — Jim Dear Jim, You can file a “Small Claims” law suit. You don't need a lawyer, although you can hire one to assist you if you desire.  If the loan was made in Lake County, you would file the lawsuit at the Lake County Circuit Court in Waukegan. (If the transaction took place in another County, you would need to file …

Dear Lisa, My father died more than a year ago. His estate is still tied up in probate and none of his property has been distributed to our family. He had a will, so I don’t understand why we have to go through this lengthy court proceeding. Would you please explain? Donald Hello Donald:   Two of the primary purposes of a probate are to ensure that the creditors of the deceased person (known as the “decedent”) are paid and that the decedent’s assets are distributed on the terms and conditions stated in the decedent’s will. If the decedent did not have will, a probate is still usually required…

Lisa, I am not sure whether or not I should purchase life insurance. I have heard pros and cons. Is purchasing life insurance as part of my estate plan a good idea? Thanks, Danielle. Dear Danielle, The answer to your question is that it depends on your personal and financial situation. For most people having some type of life insurance is usually advisable. One possible exception is a young, unmarried adult with no children — unless that person wants to buy life insurance to financially provide for a relative, friend or charity. Take the situation of a married couple with minor children where…

Lisa, I give money to several charitable causes every year. I want to make sure that I am following the tax rules and can deduct these contributions on my income tax return. Can you give me any guidance?  Thank you, Douglas Dear Douglas, Foremost, in order to take an income tax deduction you must make sure that the charitable cause you are donating to is “qualified” with the IRS. There are many sham operations out there that are not qualified, and you cannot therefore deduct contributions made to them. The IRS maintains a list of organizations eligible to accept tax-deductible donations. You …

Lisa, I have been giving my adult children money from time to time over the past several years. Now, I recently heard that there are limits on how much I can give them without having to pay a gift tax. Is this true?  Thank you, David Dear David, Yup! You may owe a gift tax if you give too much away while you are alive. The gift tax rules are complex and your gifts should be coordinated with your overall estate plan. Also, making certain types of gifts can impact your estate tax exemption. But here is the good news. Unless you are making sizable gifts, you probably will not owe any gift tax. …

Lisa, One of my customers owes me money for work I did for him. He says he is happy with my services, but still isn’t paying me. It isn’t a huge amount of money, but I would like to get paid and I want to take him to Small Claims Court. Would you explain how Small Claims Court works?  Thank you, Elena Dear Elena, I am receiving many questions from people in your shoes, which I believe is a sign of our poor economic times. Here is some information to help you out. You do not need a lawyer to file a Small Claims lawsuit, although you can hire one to represent you if you desire. If your business…

Lisa, I received a letter from the IRS saying they are auditing my 2009 personal income tax return. I am petrified, even though I don’t think I did anything wrong. Could you please explain the audit process? Thanks, Thomas Dear Thomas, Sorry to hear about this unhappy event. The first thing you should do is to contact a tax attorney or CPA to represent you in the audit. It is rarely advisable to handle the audit yourself. There are different types of audits. Sometimes the IRS will conduct an audit by mail if the issue is a simple one. An audit can also be done by an in-person interview during…

Lisa, My uncle died this year and I inherited some stock he owned. The stock has gone up in value since he bought it many years ago. I want to sell the stock, but am worried about income taxes I may have to pay. Should I be concerned?  Thank you, Ella Dear Ella, Thanks for your question, Ella. Your question raises the concept of a “step-up tax basis.” Under current law, when a person dies the value of his or her appreciated assets is readjusted for income tax purposes upon inheritance. With this “step-up tax basis,” an appreciated asset’s value in the hands of the person inheriting the asset …

Hello Lisa, I own a small paving business and am having trouble getting my customers to pay me on time. My policy is that payment is due 30 days after I do the work for them. But too many customers pay late, or not at all. I don’t want to hire an attorney. Can you give me some guidance?  Thank you, Ralph. Dear Ralph,     You have a lot of company out there! Both small and large businesses are having more difficulty collecting their accounts receivable these days. Here are a few suggestions. One obvious option is to require payment in full at the time you perform the work. However, for some …

Hello Lisa, My wife and I recently met with a lawyer to have our wills done. The lawyer told us we should also have “Powers of Attorney.”  We don’t understand why. Could you please explain why we should have these Powers of Attorney?   Thanks, Joe Dear Joe,                                                                                                      Thanks for your question. Many people share your confusion about the purpose of a Power of Attorney (POA). First of all, it is important to understand that there are two different types of POA’s that are central to most estate plans. One …

Lisa, I am trying to sell my business and have a very good potential buyer. He sent me a “Letter of Intent” to sign. I’m not sure if I should sign it. Would you please tell me more about a “Letter of Intent?”  Thanks, Tiffany Dear Tiffany, A Letter of Intent (LOI) is just what its name implies. It is a document in which your buyer sets forth his intention to buy your business. The LOI also is aimed at determining whether the two of you are on the same page regarding the deal’s general terms, such as the purchase price and method of payment. If you are on that same page, then you proceed to …

Lisa, My cousin and I just opened a small restaurant that is set up as a corporation. Our lawyer told us that we need to keep corporate minutes and follow what she called “corporate formalities” in order to protect our personal assets if somebody sued us. Is this true? And what are corporate formalities?  Thanks, Carlos Dear Carlos, Yes, Carlos, your attorney is correct. The law will not recognize your corporation as separate from you and your cousin (and you may lose your limited liability) unless you adhere to certain corporate formalities. Here is a checklist of some corporate formalities …