“Free Seminar on How to Prepare Your Own Trust … Our Fees are the Lowest in Town!” Sound familiar? You’ve just encountered a Trust Mill. A Trust Mill puts out advertisements like these to get people to attend their seminars and use their services. But what is it they are selling? The products of a Trust Mill are usually the basics of a Trust generated by “fill-in the blank” or “check the box” type of forms. You may say, “Well, all I need is the basics, a good start and foundation.” Well, a start you will have, a foundation you may not. What is missing from theses documents? Its simple: the ability to tailor your Trust to your personal needs based on your family dynamics. Is there a child who needs special care? Are you supporting a parent? Is there a child who would benefit from receiving the family residence?  Is there a non-profit organization that you would benefit as part of a final distribution of your assets? Time with an individual experienced attorney, who listens to your concerns, can tailor your Trust to none other than you.

The purpose of a trust is to distribute your property exactly as you intend. Often, when people have used Trust Mills to create their Trust, we hear over and over again from their children, “This is not what my parents would have wanted.” Maybe you missed a blank on the do-it yourself form? Did you check the wrong box? Your family will end up attempting to re-interpret your wishes because of a box that was not checked off or a blank that was not filled in. Families spend considerable amounts of time and money resolving the issues that should have been clearly outlined in the trust at its creation. Yes, the “deal” from the Trust Mill may save a few dollars up-front, but on the back end the “deal” causes more anguish, money and time in attempting to unravel what the settler’s true wishes were for the distribution of their assets.

Sunday evening: the weekend was too short, as it always is; tomorrow is the start of a whole new week. Why did Sunday have to come so fast? This week, we can’t wait for Sunday night! Why you ask? Mad Men, that’s why. The acclaimed TV show Mad Men returns for its third season.

We love being transported into the 60’s era of a slower paced life with 3 martini lunches. With its ever twisting and intriguing plot thickening, the audience gets a glimpse into what the time was like and how we evolved to now.

>>Mad Men Season 3 starts this Sunday, August 16 @ 10pm | 9C on AMC

Forgive the MTV reference to the once-favored cult classic program, but the notion of these two icons ceasing to work together seems so ridiculous and far-fetched, even more so than claymation celebrities killing each other.  Obviously, the latter is more entertaining and the former more newsworthy.  Obviously, Celebrity Death Match wasn’t worried about federal investigations.

The latest news is that Google CEO Eric Schmidt resigned from his position on the board of directors of Apple.  It may be news to many that he was actually on the board in the first place.  As Google is moving to expand its reach beyond the search engine and online advertisement monopoly (Google Voice, Google’s G1 phone on T-mobile, Android, Chrome, Chrome OS, etc…), it follows suit that there aren’t too many issues left on the Apple plate which wouldn’t necessitate Schmidt recusing himself from discussion.

Apple’s recent rejection of the Google Voice (which allows users to utilize the internet as a phone company, similar to Skype but WAY more advanced) applications from its application store was no shock to the system as they are married to AT&T for providing iPhone users a network on which to surf. The FCC is currently “inquiring” as to the basis of the rejection and are particularly concerned with any concerted action betwixt Apple and AT&T.  The FTC is continuing its investigation of the relationship between Google and Apple for anti-competitive practices and Schmidt’s resignation has not showed signs of slowing the hunt.  Arthur Levinson, formerly of biotech giant Genentech, still sits on both boards.  Don’t expect Mr. Levinson to enjoy both positions for much longer.

The blanket rejection of Google Voice apps, while expected, still sent a message about the future of telecom and the once symbiotic relationship between Apple and Google.  I would like to think that Steve Jobs is angry that we can’t all just get along.  I imagine Steve playing with the Google Voice app and routing his calls to his iPhone 5.0 beta model just to see how well it works.

You can only have one leader of the pack and it would seem that the pack is developing factions with competing pack interests.  Perhaps there are greater things to come from the packs and Schmidt’s resignation was necessary to avoid further “inquiry” and distracting governmental interest.  It doesn’t really matter.  Competition drives innovation, even if the competition is forced by Big Brother.  Perhaps we will all reap the technological rewards as the icons take a step back from each other and return to the playground for another round of tekky tether ball.

Stay tuned for more as the saga unfolds.

Today the Wall Street Journal had an article about electronic books and now textbooks being offered electronically on iPod’s and iPhone’s. My first thought was “Wow, what a great tool!” How fantastic it will be for students to work on homework literally anywhere you can have your iPhone. College graduates will enter the working world with better posture now that all their textbooks combined will weigh less than one pound. And, now with the technology of the Kindle e-reader you can travel the world with multiple books without the hassle of actually having to pack them. But, the article got me thinking: will this tool, be used as just that, a tool, or will e-books become our future?

I am a huge proponent of the electronic age; I don’t leave home without my iPhone (and when I do, its like I have left my right arm behind), I text, twitter and blog. But, the thought of phasing out books feels like a crime. What will happen to the textbooks filled with highlighted key points and scribbles in the margins? The Kindle e-reader not only allows you to read books, but also newspapers. I get a soothing feeling from reading a physical newspaper and turning the pages, and maybe getting a little ink on my hands. I like reading books and folding down the corners of the page. And yes, the Kindle does allow you to highlight, write in the margins and bookmark a page, but it just isn’t the real deal. As I came to the end of the article, I felt sad at the thought that this could be the foreshadowing of another piece of the analog world becoming obsolete.

At least once a month, we encounter a new client that formed an LLC because that’s what they heard they should do.  It’s usually unclear from where or who they heard that this was the right choice for their endeavors.  Chalk it up to the flavor of the day, perhaps.  Maybe it’s due to the explanation some of the online formation services offer.  This general statement is true – “An LLC offers the same level of insulation from liability as a corporation, without the requirements of corporate formalities.”  It’s an easy sell.  I don’t want the “formalities” of a corporation, so the LLC is obviously the right choice.  But, is it?

Another true statement – “An LLC allows for income to flow through to the individual and avoids ‘double taxation’ which occurs at the corporate level.”  AND….   Another true statement – “An S-Corporation allows for income to flow through to the individual and avoids ‘double taxation which occurs at the corporate level.”  Well, both statements are sort of true, at least in California.  California was a late adopter in the line of states recognizing the LLC as a legal entity and took an approach taken by some other states regarding a “bonus payment” due to the state, otherwise known as the Gross Receipts Tax.  That sounds awful, doesn’t it?  The LLC must pay an additional tax based on its gross receipts.  Luckily, that number is capped at just under $12k depending on the income bracket which the company falls into.  It’s usually a matter of doing the math in each situation to determine which might work out better in terms of tax liability.  There are disadvantages to having all income flow-through to the individual.  You’re going to pay tax whether you see the money or not.  CPAs are encouraged to play along at this juncture.

Ok, I’ve heard way too much of the corp-this and the LLC-that, but what’s right for me?  There are dramatic differences in the operation, management, and tax treatment of the different business entities and it’s not something to be chosen hastily.  Formality can be good and, to be honest, there isn’t a great deal of “formality” involved in running a small corporation. The shareholders and directors of the corporation must have annual meetings and those meetings should be documented and kept in the records of the company.  Certain officers have to be in place.  There are duties imposed on the directors to act in the best interests of the shareholders and the company.  Members of an LLC don’t ever have to meet.  Shareholders of a corporation don’t owe each other any duty or responsibility.  Members of an LLC owe each other a fiduciary duty, a high form of trust under the law.  The LLC offers greater flexibility in allocation of profit and loss, or discretionary distributions that aren’t tied to the percentage of ownership as in a corporation’s distribution of dividends.  Asset protection can differ dramatically between the two as well.  A judgment creditor can effectively take ownership of someone’s shares in a corporation to satisfy an obligation.  Conversely, they cannot take over the membership interests of an LLC because the law is generally unwilling to impose the fiduciary duty on someone (unless it’s a single member LLC, in which case the duty is to yourself and can pragmatically be imposed on a new single member).  And that’s just a few!

The fast-food version of the choice of legal entity has done some damage.  We constantly see operating agreements (similar to the bylaws of a corporation, the document that governs the rights of the LLC members) that, due to their “universal” application, don’t provide for many of the concerns that business owners have.  We don’t see a shareholder agreement when there clearly should have been one.  You can spend more money on reinventing the wheel than buying a better wheel to begin with.  There’s an old saying among attorneys -  “No one cares what a contract says until everyone cares what a contract says.”  It’s true, when problems arise, attorneys earn a lot of fees by dissecting documents like an operating agreement and finding an angle.  We like to define the angles according to the wishes and needs of the client from the very beginning.