Baton Rouge Legal Blog

When people in Louisiana think about starting their own businesses, it can be important to address legal concerns to ensure that the enterprise starts out on the right foot. One of the most important steps to starting a business is registering it as a legal entity. By doing this, the business has a separate legal existence from its founder or founders to handle funds, deal with debts, make contracts and otherwise engage in activities. One of the most important advantages of forming an entity like a limited liability company is providing protection against incurring personal financial liabilities in case of business difficulties.

Many entrepreneurs may be confused about how to go through the process of company formation. There can be an array of paperwork formalities and necessary forms in order to have a company approved as an LLC. There are a number of steps that people can take to get ready to form their businesses, and one of the first is choosing the name. It's not enough to have a great idea; would-be business founders need to search state directories to make sure their desired names haven't already been reserved.

Louisiana drivers who use their phones behind the wheel may want to think about what their motivations for doing so are. The Society for Risk Analysis has recently conducted a situation-based analysis that revealed four profiles for drivers who had a strong intention of driving distracted. The profiles consisted of women, people with little driving experience, individuals with a negative view of road safety and those with little inhibitions.

One conclusion that the society made was that women are more likely to use their phones behind the wheel than men are. Observational studies also show that 18 percent of people in high-income countries as well as 31 percent in middle- and low-income countries use mobile phones while driving.

When people in Louisiana plan for the future, trusts can be an essential part of an estate plan. The flexibility and control that they provide can help people to create a comprehensive plan for their assets that supports their loved ones over time and avoids the difficulties that can come with probate. However, in order to make a trust operational, it is crucial to not only create the relevant trust documents but also to make sure that the trust is fully funded with all of the property that is to be included.

For example, many people include real estate in their trusts. Transferring real estate requires issuing a new deed to the property, so it is formally transferred from the current owner to the newly created trust, with the owner as trustee. This deed will need to be recorded in order to change the official owner on file. In addition, there can be some other important housekeeping tasks that can accompany the re-titling of real estate in the name of a trust. Homeowners may need to re-file for tax exemptions and will need to inform their homeowners' insurance providers of the change.

It is important to keep up with the changing times. For instance, even though low interest rates have been the norm for the past decade, the fact that rates have been increasing lately means that estate planners need to adjust their strategies accordingly. A client living in Louisiana might be advised to use a different type of trust today than they would have been a year ago.

There are several types of trusts that are falling out of favor in the coming high interest rate climate. A case in point is the grantor retained annuity trust, GRAT for short, which thrives when interest rates are low but doesn't do well when the rates go up. GRATs pay their grantors an annuity whose size is inversely proportional to the Section 7520 rate, a rate that is calculated from the Federal Midterm rate at the time of creating the trust. Therefore, a lower Section 7520 rate translates to a higher annuity. Additionally, the lower the rates are, the lower the tax liability of the trust's beneficiaries is.