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Karen L Brady

Karen Brady’s Answers

60 total


  • Equal members in llc will loan llc funds to pay off mortgage. do we need a lawyer to draw up proper paperwork

    is there any special concerns that need to be accounted for prior to funding the loan.

    Karen’s Answer

    From your question it appears you should definitely consult a lawyer so that the loan terms are clearly spelled out and any security for the loan, such as the mortgaged building or the LLC interests, is properly documented. Every LLC member will want to know that there are clear avenues if the LLC doesn't or can't pay back all of the loan.

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  • Hi...I made an irrevocable trust for my child in NYS in 01. I'm now in MD and have had another child...can it be changed or can

    When I lived in NYS and was single with one child, I made an irrevocable trust for her. I now live in Maryland and am married with another child. Can I change the trust or cancel it?

    Karen’s Answer

    If the trust is indeed irrevocable then you cannot change it. The trust may contain provisions for a Trust Protector, who might be able to change the trust. The Trust Protector's role would be specified in the trust document.

    You cannot cancel (revoke) an irrevocable trust but you may be able to "starve" it if it is funded with life insurance and you choose not to keep paying the life insurance premiums.

    A better solution may be to create another irrevocable trust for your second child.

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  • What is the best way to restructure a rental property from JTWOS to a LLC?

    My wife and I have owned a residential rental property in Aurora, CO for 2 years. We purchased the home with an investment property mortgage and both the loan and home title are in our names. We would like to set up an LLC but are not sure how t...

    Karen’s Answer

    You are right to be concerned about triggering the due on sale clause of your loan agreement. Unfortunately, the dilemma can't be resolved through any specific structure of the LLC. Generally, to transfer the property to an LLC without triggering that clause you must get permission of your lender. Some lenders will approve the transfer while others will not.

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  • Single Family home is under LLC. Signed leasing contract with LLC as landlord. What are my personal liabilities if LLC is sued?

    I hold a single family home under a LLC name. The tenant-Landlord leasing contract is also signed under the LLC name. I would like to know , what are my personal liabilities if a tenant or someone else decide to sue a landlord (my LLC). I am askin...

    Karen’s Answer

    Generally, one of the advantages of having rental property in a Limited Liability Company is that any liabilities that might accrue to the owner of the property are the responsibility of the LLC only, and not of any members of the LLC. This can create some protection for your personal assets, provided that the liability doesn't accrue as a result of your own actions, such as if you left a door unlocked and some of the tenant's property was damaged or lost as a result.

    You should also be sure to maintain the appropriate separation between the LLC and your personal affairs. This includes, but is not limited to, maintaining a separate bank account for the LLC's income and expenses and signing documents as LLC manager. If you don't have an operating agreement for the LLC, that is also advisable to clearly document the LLC's internal structure and operations.

    If you buy property in your name and then lease in the LLC name you're likely to create confusion on the part of liability that would be to your detriment. If someone sues the owner of the property, that's still you regardless of whether the LLC is misidentified as Landlord in the lease. If the LLC is property manager then you bring the LLC into the mix for potential liability as well.

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  • Are there tax implications for allowing my elderly mother to pay me rent?

    My elderly mother just moved in with me after living with another sibiling. She feels the need to pay me rent to live in my home. She receives SSI and her checks were reduced when she moved here because I do not collect rent. I told her I would...

    Karen’s Answer

    From the facts in your question you will have to claim any amount received as rent as income. You may also have some deductions you can take as a result of the rental arrangement. Tax Topic 414 available on the IRS website, www.irs.gov can give you some more guidance on where to start. You might also have a written lease with your mom to avoid any misunderstanding and be able to document the arrangement with Social Security and other agencies.

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  • How do I get guardianship released from my soon to be ex wife? We are both guardians to my blood nephew. She wants the child.

    I am getting a divorce as my wife has metal issues I can no longer deal with. We both have guardianship over my nephew. How do I request she be removed?

    Karen’s Answer

    Only a court can remove your wife as guardian. Likewise, only a court can remove you as guardian if your wife tries to act alone as guardian. If your nephew is 13 years old or over, he will have a say in who should be his guardian. In order to sort this out, you will need to file a motion with the court that initially appointed you and your wife as guardians.

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  • Do I need to file something legally or can I just call it a "dba" and say the sole proprietor co. is part of the corp.?

    I have had a sole proprietorship company for a few years. I have now formed by own corporation. I would like to combine the two since they seem to want to run together anyway. How do I go about doing that?

    Karen’s Answer

    There are some variables in your question that haven't been provided. Generally, your corporation can operate more than one line of business and can use more than one tradename (DBA). It's not clear if your sole proprietorship has equipment or other assets that should be transferred or leased to the corporation. There are also tax issues to be considered if you do transfer assets to the corporation. That's why a lawyer and tax advisor can help you with the details of absorbing your previous business into the new corporation.

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  • We have an S Corp and would like to add an additional DBA- do we get a new EIN number for the additional dba?

    We have an S corp and want to add an additional dba under the corp, do we get a new EIN for the additional dba?

    Karen’s Answer

    You do not need to get a new Federal Tax Identification Number for a new tradename (DBA) if the existing corporation is going to pay the taxes for the business operated under that name. You may need to register the tradename with your state agency, but I am not familiar with Alabama business regulations to speak to that.

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  • Can I sell my LLC Company with out a lawery

    we wont to sell our LLC company to our son-in-law how do we do that

    Karen’s Answer

    There are a lot of variables in selling your LLC that can't be addressed in this answer. Generally, you can transfer ownership of a limited liability company to someone else by transferring your membership interests to that person. While transfer of membership interest can be done through an assignment, it's best to have a contract that sets out the details, such as what debts of the LLC are being assumed as part of the purchase. When someone takes over full ownership of an LLC, they also take all the company's debts, so you usually want it clear what the known debts are so you can't be accused later of withholding material information.

    Transferring membership interest in the LLC won't necessarily relieve you of any personal debts related to the company, such as a lease that you personally guaranteed.

    This answer doesn't address any of the tax consequences of the sale, as there are too many variables to discuss that here.

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  • What is the difference between a 501 c 3 and a 501 c 6 classification

    i understand they are both not for profit but there is a difference

    Karen’s Answer

    A nonprofit classified as a 501(c)(6) is usually a "business league", that is an organization whose purpose is to promote a business purpose, such as a chamber of commerce or a trade association.

    A nonprofit classified as a 501(c)(3) is generally more of a social welfare or religious organization, such as a food bank or child abuse prevention organization.

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