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Contesting the Validity of a Will

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If someone brings an action to contest a will, he or she is claiming that, for one reason or another, the will is invalid and should not be used in the administration of the estate of a deceased person. You can probably imagine that this will frequently happen if someone such as a family member expected to receive a sizeable amount of money or property and found out that this was not the case after the will came to light. Challenges to the validity of a will can be costly and time consuming, but the person bringing the will contest claim may see it as worth the cost and effort if he or she believes to be entitled to a substantial inheritance.

What Can Invalidated a Will?

If successfully proven, several grounds will work to invalidated a will, including:

  • Duress: If a will was obtained through threat of harm, it will be invalid. Additionally, if the will was obtained through fraud or coercion, it will be invalid. Undue pressure on a person to create a will a certain way can invalidate the will. This is difficult to prove, especially years after a will was created, but it can be done. If a person in a position of power over the deceased individual received a surprisingly large inheritance and someone else expected to receive the large inheritance was left out, this will raise suspicion of duress. There still needs to be more evidence presented, however, for the court to rule the will invalid.
  • Lack of mental capacity: At the time of the will’s creation, the testator needs to be of sound mind. This means that the will may be invalidated if it is proven that he or she was intoxicated at the time of the will creation or that he or she suffered from some mental disorder or temporary insanity. The testator must have been able to fully comprehend what he or she was doing. The testator must have been of sound mind.
  • Will execution: Every state has specific formalities that must be observed in the creation of a will. Failure to observe these formalities can later lead to the will being invalidated. For example, there must be the proper number of witnesses when a will is executed. If the will was not notarized, this could also lead to it being held invalid.

What Happens If a Will is Invalidated?

If a court holds a will to be invalid, the estate will most likely be handled as if the deceased had died without any will at all. This means that the probate court will follow the state rules of intestacy in distributing the contents of the estate. Generally speaking, intestacy laws distribute the property of the estate to the closest living relatives of the deceased. If there is no immediate surviving family, more distant relatives stand to inherit the property of the estate. If no living relatives can be found, the property of the estate will pass to the state.

In some cases, there might be a previous will that was revoked by the will found to be invalid. If the previous will was revoked because of the existence of the will that was found to be invalid, the court may choose to revive the former will.

Probate Administration Counsel You Can Count On

Claims contesting the validity of the will are just some examples of bumps in the road to probate administration. PALUMBO LAW have the knowledge and experience to help you and your family navigate these difficult a

Protect Your New Business with Preventative Legal Planning

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Most Legal Issues Can Be Resolved Before They Even Arise. Here’s How.

Most people are familiar with the idea of “preventative” legal action. The term refers to anticipating legal issues and conflicts and working to prevent them, rather than solving them or “winning” them once they occur. Companies can benefit from implementing preventative legal strategies as this approach is often less expensive than litigation, mediation, arbitration, and local, state and federal fines.

By working with an attorney early on in the creation of your new business, you can build a sound foundation for your company while likely saving money down the road. The following steps can serve as a great starting point for sound legal planning:

  1. Establish a relationship with an attorney who can assist you with the legal issues your new business will face early on in the start-up process. When an attorney is familiar with your firm from the onset, he or she can more effectively anticipate and address legal challenges and provide solutions. Also, many business law attorneys will allow for a flat-fee relationship that enables you to address legal issues as they arise without incurring any additional expenses.
  2. Determine what you want, negotiate it and memorialize it in proper legal documents. Businesses encounter disagreements with vendors, landlords, employees, partners and others. To minimize the number of conflicts, it’s important to establish written contracts for all important agreements, arrangements and accommodations.

    A business law attorney can help you identify all key concerns regarding employee compensation and benefits, property usage and maintenance, relationships with suppliers and responsibility and profit sharing with partners. An attorney can ensure that, when a question, disagreement or conflict arises, your interests are written down, clearly stated and legally protected by a mutual agreement with the party in question.

  3. There are many exciting steps in starting a new business venture; selecting the type of legal entity the business will be is rarely one of them. Yet, it’s important to select a business structure early. Corporations offer numerous advantages but also require officers, boards, articles of incorporation and other formalities. Partnerships and sole proprietorships are simpler than most other business structures but open owners to potentially costly liability. Limited liability companies offer a middle ground for many, providing a liability shield and comparative simplicity. A business attorney can help you determine which business structure will work best for you by taking into account tax planning, location and other key considerations.

Even with preventative legal planning, a lawsuit may arise. If it does, it’s important to approach it from a business, not a personal standpoint. This strategy can help you make decisions that are best for your company’s future, keep your focus on the day-to-day needs of your business and avoid unnecessarily disclosing information. For legal advice and hands-on assistance during the formation and continued operation of your business, contact a qualified business attorney.

Rhode Island Simplified Probate for Small Estates

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Rhode Island estate law provides a shortcut in the probate process for smaller estates. It is a simplified probate process that allows for an easier transfer of property to the heirs of a person who has died. If an estate qualifies as a “small estate,” a form can be filed and the assets of the estate will be distributed without the need of going before a probate judge. The executor of the estate can file the form, a written request, with the local probate court asking that the estate goes through the simplified probate process. It is a valuable exception to take advantage of as the full probate process can be time consuming and complicated. Make sure you have all of the information you need to see whether an estate may fall into the small estate category and consult with a knowledgeable estate planning attorney to double check calculations.

What Qualifies as a Small Estate for Simplified Probate?

Whether there was a will or there wasn’t a will, the focus of whether of an estate will qualify for the simplified probate process entirely depends on the size of the estate. If an estate does not include real estate and the value of the property in the estate that would be subject to probate is $15,000 or less, then the estate will qualify. It is important to note that the calculation will not include property that would not be subject to probate. You see, not all property of a deceased individual would have to go through the probate process. Some assets pass outside of probate. These assets include:

  • Assets held in joint tenancy or tenancy by the entirety with rights of survivorship
  • Life insurance policy proceeds
  • Retirement accounts
  • Payable or Transfer on death accounts (such as bank or brokerage accounts)

All of these assets will pass directly to the named beneficiary or the surviving co-owner of the property. Because the assets would pass outside of probate proceedings, they do not count for purposes of calculating whether an estate will qualify for the small estate simplified probate procedure. Assets that would be subject to probate proceedings need to be valued and then the values would be added up to see if the total estate value is $15,000 or less.

Estate Planning Legal Counsel You Can Count On

The small estate exception allowing for a simplified probate process is valuable. Many will tell you that the ability to avoid probate is a gift in and of itself. If you have questions about whether an estate may or may not qualify for the simplified probate process, contact trusted Rhode Island estate planning attorneys at PALUMBO LAW. We are here to make sure you and your loved ones reap the full benefits of estate planning. Contact the PALUMBO LAW today.

Family Businesses: Simple Steps to Avoid Common Pitfalls

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If you have a family business or are thinking about starting one, kudos to you! There are few better ways to create tradition, meaning and bonds within a family, and a family business can be a gratifying way by which to build wealth.

Family enterprises, however, can bring conflict, legal challenges and financial distress when simple preventative steps are not taken. A business law attorney can assist you with the following issues commonly faced by family businesses:

  • The absence of a succession plan. If the leader of a business dies, sells or becomes incapacitated, the business he or she leaves behind will appoint a leader, somehow, by necessity. The succession process at that point, however, will likely be complicated, and the result may not be optimal for the business or your family. An attorney can assist in identifying all of your options, and help you select one that works best for you and your business. For instance, if the business belongs exclusively to you, you can simply leave it to the person you feel should own and run it. If the business is professional in nature, such as a medical or legal practice, you can identify an outside buyer/successor and prepare him or her using a process agreeable to both of you. If the business belongs to two or more family members or other individuals, a contractual succession plan can be devised, lessening stress both now and at the time the succession occurs.
  • The lack of employment agreements. It’s rare that families who start businesses together are initially comfortable discussing the particulars of vacation and sick days, wages, raises and absenteeism. Yet these issues affect every business and will affect yours. The time for all parties to discuss expectations and rules is now, before issues arise, not later, when issues have already led to resentment and confusion.
  • The failure to acquire a business license. Often, small business start-ups skip the step of acquiring a business license that may be required in a particular industry, perhaps choosing instead to wait and see whether the business will succeed. It’s important, though, not to avoid this step. By not acquiring a business license and necessary zoning permits and by not meeting other legal requirements, you expose your business not only to penalties but also the possibility of being shut down with financial and reputational consequences that accompany an unexpected closing.
  • Mixing personal and business funds. The separation of personal and business funds isn’t just good business; it can save you money. When personal money “disappears” into a business owned by you and others, you’ve lost at least part of those funds regardless of how successfully they’re put to use by the business. An issue related to separating personal and business funds is that of separating personal liability from that of the business. By housing the business in a legal entity, such as a corporation or limited liability company, you can shield yourself from liabilities faced by the business.

Drafting contracts, obtaining needed licenses, negotiating with municipal entities and selecting and creating a business entity can involve complex legal issues. To ensure success and to protect your interests, contact a qualified business law attorney.

 

Securities Sales: When Do You Have to Register a Transaction?

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SEC Registration Exemptions Under Regulation S

Following the stock market collapse of 1929, Congress tightened restrictions on businesses’ activities related to the sale of securities. A key provision of the Securities Act of 1933 is the requirement that, with few exceptions, securities issuers must register securities transfers with the SEC. Now, seven decades later, the strict registration requirements of the Securities Act continue to apply.

An exception to securities registration requirements is Regulation S which allows securities issuers to solicit and sell to investors outside of the U.S. without registering the sale with the SEC. But how does the SEC determine when a securities sale qualifies as occurring fully outside of the U.S.? And how do securities issuers ensure they are in compliance with the Securities Act when choosing not to register a securities sale under Regulation S?

Compliance with Regulation S is not always black and white. There are various scenarios that require a more nuanced understanding of the law:

  • Did the securities solicitation and sale occur “outside the U.S.” as defined by the SEC? Often, questions arise regarding the buyer’s knowledge of the investment opportunity while still in the U.S., and whether prior knowledge of the investment opportunity constitutes “solicitation”. An attorney can determine whether both the sale and the original solicitation occurred on foreign soil.
  • The SEC dictates that a resale “cannot be knowingly made to a ‘U.S. Person’ prior to the end of the relevant distribution compliance period.” The SEC also states that, in instances in which a party outside the U.S. acts on behalf of a party located in the U.S., the party outside the U.S. may be acting as an agent or attorney-in-fact. An attorney can determine whether Regulation S applies to the parties in question and whether an agent/client relationship exists, and can determine the length of the relevant distribution compliance period.
  • Can a student or other individual who is residing in the U.S. temporarily be approached regarding a securities sale under Regulation S? The SEC provides extensive guidance regarding how and when Regulation S applies to non-resident aliens, lawful permanent residents and holders of specific visas. A lawyer can determine when securities issuers can sell to parties holding various visas and in which circumstances.

To conduct securities sales under Regulation S, issuers must be familiar not only with the issues discussed above but also, often, with the regulation’s dictates regarding EB-5/Investor visas, safe harbors and resale safe harbors, regional regulations and a host of other issues. A quick scan or even an in-depth study of Regulation S and other components of U.S. security laws is most often insufficient to ensure that security transactions are fully within applicable laws. To ensure complete compliance when conducting securities sales under Regulation S, contact a securities law attorney in your area.

The Probate Process

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While you may have vaguely heard of the term “probate”, you may very well have no idea what it actually refers to. Yes, it does involve distributing the property of a deceased individual to the heirs, but there is actually a lot more going on. In fact, probate can be incredibly complex and time consuming. While careful and comprehensive estate planning can prevent this to a large extent, probate is still much more than giving property to heirs after a loved one has passed away.

What Happens During Probate?

The following will describe how the probate process will unfold after someone has died with a will in place. The process would look different if a person died without a will.

In general terms, probate refers to the official, court-supervised settling of an estate. A probate judge will determine whether there is a valid will in place. A person, referred to as the executor or personal representative, will be appointed by the will or, if the will does not specify, by the court. The executor of the estate will be in charge of settling the estate and will be supervised by the probate court.

The executor plays a vital role in the probate process and has extensive responsibilities that include:

  • Gathering and valuing the assets of the estate
  • Notifying all potential creditors of the estate
  • Paying all valid debts of the estate
  • Paying taxes
  • Selling real estate and other assets of the estate
  • Distributing remaining assets to the beneficiaries according to the terms of the will

The order and manner in which the above responsibilities are carried out is incredibly important. More specifically, the probate process will look like this:

  • The will of the deceased individual, referred to as the “decedent,” must be filed with the probate court within 30 days of his or her death. It must be filed in the probate court in the county where the decedent lived.
  • The Petition for Probate must be filed with the probate court which requests the appointment of an executor. Notice to all heirs must be sent out.
  • “Letters Testamentary” will be court-issued to the executor granting them legal authority to carry out the above referenced duties.
  • Notice of the probate proceedings must be published in a newspaper where the decedent lived in order to give notice to creditors. Creditors will have six months from the date of publication to file a claim against the estate.
  • The executor must file an inventory of the estate’s assets and the value of the assets with the court.
  • All valid debts and applicable taxes must be paid.
  • Assets remaining after the payment of debts and taxes will be distributed to the beneficiaries according to the terms of the decedent’s will.

Sound Legal Counsel to Guide You Throughout the Probate Process

Probate can be a complicated time. Add this to the fact that you have to go through the probate process after the passing of a loved one and it can be a lot to handle on your own. At PALUMBO LAW, our

Terminating a Franchise Agreement

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Buying a franchise can be a great opportunity for an entrepreneur to start a business using a successful operational structure of a proven model. Despite all the resources that a franchise provides, not all are successful. Unfortunately, with most franchises, you can’t just shut your doors and cut your losses; getting out of a franchise agreement can be difficult, leaving a once hopeful entrepreneur stuck in a business that may not be profitable or enjoyable to operate.

If you are looking for a way out of a franchise agreement, it’s absolutely imperative that you contact an attorney who has experience with franchise law and understands the many complexities of the franchisor-franchisee relationship. In determining whether you can terminate the agreement, you will need to carefully review the contract which should clearly outline the circumstances which must be met for either party to terminate it. If the franchisor has not met all of its duties, such as failing to send you the marketing plan and materials for the spring line, you will likely have a much stronger case for ending the relationship. Be sure to document any shortcomings or errors made by your franchisor and keep records of any correspondence which have expressed these concerns.

Even if you are able to close shop and terminate the franchise agreement without any substantial fees or legal ramifications, you may still be adversely affected by non-compete and/or confidentiality clauses contained within the agreement. Very often, franchise agreements prohibit franchisees from starting a similar business within a certain period of time and within a certain number of miles from the franchise location. Also, they may prohibit you from contacting any customers from your former franchise, severing long-time business relationships and limiting your ability to be successful with a new venture.

An experienced attorney can help you understand your rights, serve as your advocate in discussions with the franchisor and protect your best interests so you can confidently move on with your entrepreneurial aspirations.

Protecting Your Business with the Right Insurance

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Starting a business is the dream of a lifetime for many Americans. While most entrepreneurs prefer to focus on the aspects of the business that will result in profit, it’s equally important to consider what will happen in the event of an emergency, injury or even sudden death. In preparing for the “worst case scenario”, insurance coverage must be carefully considered. Selecting insurance policies can be challenging; there are dozens of options and the necessity of some will depend largely on the type of business, the number of employees (if any) and the physical location(s).

To help you get started with your planning, we’ve compiled a quick checklist of different types of insurance that all business owners should consider:

General Liability Insurance – Regardless of the type of business or where it is located (even if it is in your home office), all owners should purchase this type of insurance which provides protection if you or your employees cause bodily harm or property damage to a third party. This type of insurance can protect against a customer who brings legal action after taking a sip of hot tea that you served in the reception area or even a vendor who was injured when an item from a closet shelf fell on him during a delivery to your office.

Commercial Property Insurance – If you own an office building, or have valuable business property such as equipment, inventory or tools, you should carefully consider this option which protects your company from any damage or loss which might occur as a result of fire, theft, vandalism, etc. In assessing which policy you need, also take time to consider whether you need business interruption insurance which may protect your business from a loss of earning when you are unable to operate; this may be helpful in the aftermath of a natural disaster where your building is without power for several days.

Product Liability Insurance – If your company manufactures, distributes or retails products to consumers, you might consider purchasing this insurance which protects against financial loss suffered as a result of a product defect that causes injury to the user.

Business Owners Policy (BOP) – This type of package is essentially a bundle offering of all of the required policies that a business owner would need. This will often include property, liability, vehicle, business interruption, etc. These policies often save business owners more money than if they were to purchase each one separately.

Professional Liability Insurance – If you provide a professional service to consumers, you may consider carrying this type of coverage which provides defense and damages for improperly rendering professional services, or failure to deliver them at all. Depending on your industry, this insurance may be mandated by your state. Professional liability insurance has become quite standard among healthcare professionals, attorneys, veterinarians, pharmacists and architects.

Commercial Auto Insurance – If you have a single vehicle, or an entire fleet, that is used to carry employees, equipment or products, you should consider purchasing commercial auto insurance which protects from damages and collisions. If your employees use their own vehicles, you may have the option to purchase non-owned auto liability, which protects your business in the event that an employee has an accident but does not have sufficient coverage to pay for the damages.

Data Breach Insurance – Also known as cyber insurance, this type of policy protects against any damages incurred as a result of a hacking at

Do I need to file a DBA for my small business?

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Selecting a name for your business can be challenging. It must be unique, memorable and representative of your product or service. Depending on the name you ultimately choose, you may also need to file for a DBA.

Simply defined, DBA stands for “Doing Business As.” A DBA is a fictitious business name, also referred to as an assumed business name, that differs from the personal name of the owner(s) or the official name of a registered corporation. For example, if Patricia Smith is a sole proprietor and opens her bakery under the name of Patty’s Cakes, the bakery would have an assumed name because it is not the owner’s legal name.

DBAs are a form of consumer protection, giving customers insight into the individuals or corporation that they’re really hiring or purchasing a product from. Generally speaking, there are two instances where a DBA will be needed:

  1. A sole proprietor or partnership where the owner(s) names are not used.
  2. An existing corporation or LLC wants to do business under a different name. This may occur when a new product is launched or the company is looking to expand into a new industry.

For sole proprietors, who operate under an assumed name, a DBA is often required to open a bank account and start accepting payments for the business. It’s important to note that not all states require the registration of a DBA. Furthermore, a DBA is not a substitute for a trademark which requires a separate application that must be filed with the United States Patent and Trademark Office. If you are looking to start a business under a fictitious name, it’s imperative that you consult a business attorney who is familiar with the business formation laws in your county and state. When registration is required, this can generally be done with the county clerk’s office or your state government.

How to Negotiate the Lease on Your Office Space

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It can be very exciting for a business owner to finally find office space that will work for his or her business. Do not let this excitement prevent you from taking the time upfront to make sure the office space and the lease agreement associated with the office space will be right for you. Negotiating the best office lease to meet the needs of your business can save you a great deal of money and headaches down the road.

What Should I Be Mindful of When Negotiating My Office Lease?

The opportunity to negotiate the lease for your office space can give your business flexibility and peace of mind that may very well prove invaluable. Make sure you take care to address some of the following in your lease:

  • Permitted use of the premises: Is this office space going to allow you to conduct the business you want both now and in the future? When negotiating your lease, attempting to secure a broad permitted use clause will best protect your ability to expand and change your business as you see fit.
  • Extension option: This lease provision can protect your ability to extend your lease while limiting the amount your rent may increase. Take into consideration how many options to extend your lease you may have. Consider a provision limiting the amount you rent may increase upon extension. Additionally, the extension option provision of the lease can require your landlord to remind you about the option to extend should you fail to provide notice by a certain date.
  • Termination option: Sometimes a business does not work out or operating a business in a certain space does not work out. Any number of factors can account for this, but you want to make sure your lease has a termination option that will not unduly punish you should you need to end your lease prior to its end date. It is unlikely that you will avoid paying any fees for an untimely lease termination, but you can use the termination option provision to minimize your liabilities as much as possible.
  • Right of first refusal: This option is a popular addition to office leases. It gives you, the tenant, the right to lease additional space in the event an outside party expresses interest in leasing that space. For example, if there is surrounding space that you ever might want to expand into and someone else expresses interest in that space, the landlord would give you the first opportunity to match any offer made to lease the specified space. The right of first refusal provision should specify which space(s) the right pertains to. It should also specify whether the right is a one-time option or whether it will continue throughout the length of the lease.

Trusted Legal Counsel for Businesses.

PALUMBO LAW is here to provide our clients with exceptional legal services. We are here to protect your business interests right from the start. Contact the PALUMBO LAW today.