Wichita KS, January 1, 2020 – We are pleased to announce that Kurt A. Harper is now a partner in our firm. Joining our firm in 2019, Kurt continues to focus on commercial litigation and alternative dispute resolution. He represents clients across a variety of industries in a variety of fields, including business litigation, and real estate and construction litigation.
When it comes to wills, there’s one thing for certain: you won’t be around when yours is read! One way to avoid unintended consequences for your surviving loved ones is to make the best thought-out last will and testament or trust that you can.
“I tell folks that I think they do a service to their family when they do estate planning,” Kimberly Vining, an attorney at Depew & Gillen in Wichita, Kan., said. “It potentially makes their family’s lives easier and simpler, whether that’s with a will or trust or other method.”
For many people, the process starts with a visit to a lawyer. Vining’s first step is to sit down with her client, learn all the important facts of their situation and how they wish their assets to be taken care of after death. “You get to know the client, what their concerns are and what’s driving them to see you,” Vining, who’s been in practice 11 years, said. “When I know what their situation is and what their goals are, I draw up a draft of their document, send it to them and answer any further questions. It’s their plan so you want to make sure they understand it. That’s important before signing it.”
Vining said a number of factors prompt people to make wills or trusts. It may be the birth of a child to a young couple who want to name a guardian in case the worst should happen. It may be someone who owns a business and wants to make sure its assets are looked after in a similar situation. Often, it’s someone whose parent has died and who has been through the experience — good or bad — of seeing that parent’s estate settled. “They’ll say ‘That worked well’ or ‘Oh my gosh, I don’t want my kids to go through that,'” Vining said. “A lot of times the kids maybe never had a conversation with mom or dad about what they owned.”
When people have complex business interests, out-of-state property, a blended family or family members with special needs, the need for a will or trust becomes even more critical.
Vining has seen both sides of the equation. In addition to writing wills and trusts for clients, she helps administer estates. “Working on the administration side really allows me to see the value of it,” she said. “You see how things play out.”
Online will services exist, but if a person has any questions about the process, it’s certainly more reassuring to deal with a professional trained and experienced in the law than a simple online FAQ. “I think that’s a huge disadvantage, not getting questions answered, or not knowing which questions to ask,” Vining said. “To me, one of the most critical components is the education side of it.” By law, online will services contain disclaimers that they cannot offer legal advice. And while those online services offer fill-in-the-blank forms, Vining notes that estate planning is “not one size fits all.”
Even riskier is the decision — and it is a decision — to make no will at all, which leaves your assets to be disposed of according to the dictates of state law. “Some people think estate planning is only for the wealthy,” Vining said. She assures them it is not.
Vining urges people who want to make a will or trust to ask friends and family if they can recommend a lawyer. “A referral is a good way if they’ve had a positive experience. Do your homework and find a lawyer who has that knowledge and experience.”
Kim Vining, Attorney
December 16, 2016
Under the authority of the Clean Air Act, the United States Environmental Protection Agency (EPA) is poised to send information collection requests, called “ICRs,” to thousands of oil and gas operators in Kansas and across the country. ICRs are a tool the EPA can use under the Clean Air Act to obtain information from individuals and organizations for the purpose of developing new air emissions standards and regulations. EPA has stated the purpose of this ICR is to gather information in order to eventually promulgate new air regulations limiting emissions of methane gas from existing oil and gas facilities. Oil and gas facilities include wells, compressors, separators, sweeteners, storage tanks, and pneumatic controls and pumps. Operators can expect to receive the first of these new ICRs before the end of 2016.
EPA has identified the operators who will receive the first part of this new ICR on its website, available at https://oilandgasicr.rti.org. There are two parts to this ICR. Part I is called the operator survey. It requires an inventory of all oil and gas facilities as well as the number of wells, separators, storage tanks, and compressors at each facility. Part I must be completed and submitted to EPA within 30 days of receiving it.
Part II is the detailed facility survey. It will go to operators of selected oil and gas facilities that, in EPA’s opinion, constitute a representative sample of the domestic United States oil and gas industry. Any facility that is selected to receive Part II will be exempted from having to complete Part I. Part II is much more detailed and demanding than Part I. It requires a wide variety of specific information, including for example, equipment counts and measurement data. Part II must be completed and submitted to EPA within 120 days of receiving it. Both Parts I and II are available for viewing on EPA’s website, available at https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry/oil-and-gas-industry-information-requests.
Failure to respond to an ICR, which is sometimes also called a Section 114 letter, could carry penalties under the Clean Air Act of up to $93,750 per day of violation. Obviously, oil and gas operators face significant liability for failure to properly respond to these ICRs. The counsel of an experienced oil and gas environmental lawyer may prove helpful in answering the ICR.
November 21, 2016
Bob, a handy entrepreneur, plans to renovate condominiums, townhomes, and small apartment complexes with the help of a friend, Monet, who inherited a lot of money. They plan to flip some and rent some. Bob and Monet have heard that it is a good idea to form a company to protect them from outside claims, but are not sure if they should incorporate.
Bob states, “I don’t want a lot of paperwork and meetings. I want to get things done. For now, the business will just be the two of us.”
Monet adds, “I have a lot of money and want to protect it. Bob is the builder, I just want to put in cash and have Bob show me the money.”
Bob, “Yeah, I will scout the properties and do all of the work, but Monet will put up the cash to buy the condos and stuff, at least at first.”
It appears that a limited liability company or series limited liability company is the form of business that will best serve Bob and Monet. Here’s why.
A limited liability company (LLC) protects the owners against personal liability like a corporation. As a separate entity, the LLC will shield Bob and Monet from personal liability from outside claims stemming from business they do in the LLC. Unless they do something wild and crazy, they only will be liable for the debts and obligations of the LLC up to the amount of their respective investments in the LLC. Unless Monet offers a personal guarantee, only the money she invests in the LLC will be at risk.
And, unlike a corporation that is taxed at the corporate entity and shareholder levels, in an LLC, income taxes are only levied at the individual owner’s level as in a partnership. This “pass-through” tax treatment also will allow them to write off losses. Another perk of an LLC is that non-wage income earned in a “pass through” business like an LLC is not currently subject to income tax at the state level in Kansas. More money for Bob and Monet.
Remember, Bob doesn’t want to get bogged down with a lot of formalities. Since the activities of an LLC are governed by an operating agreement, you don’t need a lot of meetings, votes and resolutions to get business done. In an LLC, you can make management of the business simple and flexible in the operating agreement.
While Bob is hustling, Monet is simply looking for a return on her cash. In an LLC, ownership and profits interests can be different. For putting up the cash, Monet wants to own 60% of the LLC, but has agreed that since Bob will be doing all of the work, that he will get 75% of the profits. In an LLC, you can split ownership 60%-40% and profits 25%-75% (or any other ratio).
Since Bob and Monet plan to collect rent, a form of passive income, they are better off with an LLC than an S corporation. An S corporation is a form of corporation that allows for that favorable pass-through tax treatment like an LLC or partnership, but an S corporation may not have passive income that exceeds 25% of its gross receipts in 3 consecutive years, or it will be subject to taxation at the corporate level too. They don’t want double taxation.
Monet, “Hey, what about that Series LLC?”
Bob and Monet plan to make a number of real estate investments, so it may be a good idea to isolate the liabilities of certain projects in separate LLCs. A series LLC may reduce the expense of forming, maintaining, and administering multiple LLCs. In its operating agreement, an LLC may establish one or more series of members, managers or interests having separate rights and duties with respect to specified property. The organizational documents can provide for each series to have limited liability so that the debts and liabilities of a particular series will only be enforceable against the assets of such series. A claim arising out of any property should not allow a claimant to reach the assets of any other series.
Robert J. Vincze
October 21, 2016
Depew Gillen Rathbun & McInteer, LC
This article is based on hypothetical facts and is issued for general informational purposes only. It is not intended to be construed or used as legal advice.