Have You Had Your Legal Checkup Lately?

698914It happens every year. My doctor’s office, calls to tell me I need to schedule an appointment. Why?  Because it is time for my annual check-up. I always forget.  That’s ok, that’s why my doctor’s office is calling me. I make the appointment and I appreciate the reminder.

So, where am I going with this?  No, I’m not suggesting that every one of my clients call to book yearly appointments with their attorney. What I am suggesting is that, if it has been some time since you have taken stock of the legal matters affecting your life, perhaps it is time for that legal checkup.

Doctors recommend periodic checkups. While it might not seem as important, a “legal checkup,” which is often called “preventive law” is also improtant. Getting a legal checkup can keep you in good legal health and save you money by identifying small legal problems before they become large ones.  A legal checkup is a review, with your lawyer, of your most important legal matters, papers, and areas of your life.  Like illnesses, many legal problems can be cured or even avoided if found early.

There are several steps in a legal checkup. The first is collecting important legal papers (see below for more information on which papers to keep). Just locating important papers can help prevent future trouble. So can discovering that one or more is missing. Reviewing papers can remind you of things you’ve forgotten to do or of questions to ask.

The next step in your legal checkup is analyzing your current legal situation in light of your goals. Some areas you will want to pay particular attention to are:

Will and estate planning

Do you have key estate planning documents like a will and living trust?  Having these documents helps you make sure your property will go where you want when you die and that your heirs will receive the property in the fastest and least expensive manner.  It also provides other benefits, including letting you select who you want to be guardian of your children in case you and your spouse die while they are minors, and letting you select the person to administer your estate when you die.

Proper estate planning includes more than just having a will and living trust. It also includes making sure you have the necessary documents to make sure your medical and financial decisions are made by the people you want if you become incapacitated, and that your wishes regarding the use of life-prolonging equipment will be known in case it’s ever needed.

Even if you have all necessary estate planning documents, it is important to make sure they are up-to-date. If your will and other documents were made a long time ago, changes may be needed due to increased wealth, changes in your marital status, the addition of new children or grandchildren, death of heirs, changes in your wishes about who should receive your property, and changes in tax laws. For example, reviewing a will you made long ago could reveal the need to make an amendment which can be done at low cost. However, if you die without updating your will, an expensive dispute could arise between family members.

Insurance

Do you have enough and the right kinds of insurance coverage? Liability, casualty, property, life, long-term care and disability insurance provide more than just peace of mind. They provide you money to soften the blow of a disaster. They help pay your legal defense costs if you are sued. Good insurance is key to good legal health.

Closely related to insurance is the need to keep good records of your personal property in the event you suffer a fire or other disaster.  Your personal property records should be kept in a safe place, and should include as much information as possible about the property, including descriptions, purchase receipts and photos.

Property Ownership

How you hold title to property has important consequences. It affects what happens to the property if you separate, divorce or die, it controls who has power to make decisions about the property, it has important tax consequences, and it determines whether or not creditors can reach it.  In many cases, people hold property in a form of title that is contrary to their goals. A key part of a legal checkup is making sure title to all your assets — including your home, car, stocks, bonds and bank account — is held in the proper form.

Contracts

Contract disputes can be expensive and time-consuming. However, there are easy preventive measures to reduce the risk of being involved in them. One is to put all important agreements in writing. Though the law allows both oral and written contracts, certain kinds of contracts must be in writing to be enforceable. Also, oral contracts are riskier, because there’s no clear evidence of the terms or that they were even made. Putting key agreements in writing — and making sure any oral modifications to existing written agreements are also put in writing — can help avoid costly legal problems.

Another easy way to help avoid legal problems from contracts is to read and understand every contract before signing it. Because of time constraints, or for other reasons, many people do not follow this rule. Unless there’s a legal basis for canceling a contract (such as fraud or misrepresentation), a court usually won’t change a contract, even if it has many one-sided provisions in small print. When you read a contract, if you are unsure about anything, seek legal help.

Important Papers

Keep your important records in a safe location, like a bank safe deposit box.  In addition to you (and your spouse) knowing where these documents are, you should inform someone you trust, like your lawyer. Some of the main documents you should have in a fireproof location are:

• birth certificate

• adoption papers

• marriage and divorce records

• military discharge (DD-214)

• immigration records

• insurance policies

• deeds to property

• stock certificates, bank and retirement account records

• income tax returns

• will, trust, living will and other estate planning documents

Finances

Financial problems are at the root of many legal problems. If you are having trouble paying bills, you should consider available options for getting a fresh start.  A lawyer has the skills to negotiate debt settlements on your behalf.

Small Business Books and Records

Articles of Incorporation/Organization; Certificates of Limited Partnership: Are they still accurate? Do they provide maximum protection from liability?

Bylaws/Operating Agreements/Partnership Agreements: Do you have them? Do you follow them? Should they be revised to conform to your actual practices? Have all owners signed off on them?

Buy-Sell Agreements/Shareholder Agreements: Do you have one? Do you need one? Have all owners signed off on it? Is it current? Does the valuation mechanism still work? Does it require annual valuations? If so, is your valuation current?

Stock/Membership Certificates/Registry: Who has the original certificates? Do you have an accurate current registry?

Meeting Minutes (including Annual Minutes) and Biennial Reports: Do you have periodic meetings and keep written minutes? Do you have annual minutes? Are they current? Have you filed your most recent Biennial Report?

Certificates of Authority to Transact Business: Do you have one? Do you need one? Is it current?

Subsidiaries and Affiliates: Do you need any? If you have any, do you keep separate books and records and financial statements?

Registered Agent/Registered Office: Do you have one? Do you need one? Is it current?

Like checkups for your physical health, a regular examination of your legal health can keep you fit as well. If your legal affairs are in good condition, your checkup will involve recommendations to keep them that way.  If your legal affairs are in poor condition, Huddleston Law Offices will alert you to problems you might miss on your own.  Attached is a LEGAL HEALTH CHECK-UP CHECK LIST I have prepared to help you assess whether you need to schedule a legal checkup.

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