Meeting Minutes: What They Are and Why Every Business Needs Them

When starting a business, many entrepreneurs jump immediately into day-to-day operations. They often struggle to make time to develop systems for documenting how decisions are made. However, failing to keep a written record of the factors that lead to business decisions can increase the risk of liability if things ever go awry. As a result, it is best practice for every company to keep some form of meeting minutes.

What are meeting minutes?
Meeting minutes are the notes taken during a company’s or organization’s meetings. They are used to document the discussions, decisions, and resulting action items. For companies organized as corporations under state law, creating and maintaining minutes is often required. This requirement is tied to the requirement that a corporation hold at least one shareholders’ meeting annually. However, corporate shareholders are free to have more than one meeting per year and often do.

Regular meetings are not typically obligatory for limited liability companies (LLCs). However, conducting regular meetings and recording meeting minutes can significantly decrease an LLC’s risk of losing its limited liability protection because this practice clearly demonstrates that it is an entity distinct from its owners. When this distinction is not clear due to a company’s lack of formalities, such as the failure to take minutes at business meetings, courts may invoke a principle called “piercing the corporate (or limited liability) veil.” When a company’s corporate veil is pierced, the company’s owners can be held personally liable for the company’s debts and liabilities. By keeping regular meeting minutes, the owners can strengthen their defense against any claimant who may seek to pierce the veil of limited liability.

From an administrative perspective, it is also highly beneficial to have a historical account of the company’s evolution. Depending on the organization’s intended goals, this background can ensure that the rationales for essential decisions made during company meetings are recorded so that the individuals carrying out those decisions understand the underlying objectives of what they have been asked to do.

Should single-member LLCs and sole shareholders also keep minutes?
If a company has only one owner, it may seem nonsensical to keep regular minutes from meetings conducted by the owner alone. Nevertheless, a single owner may be best positioned to benefit from this practice. In cases where there is only one owner, a failure to keep business and personal matters separate often makes it easier for a claimant to argue that company formalities have been disregarded and that limited liability protection for the owner should not exist. If you are a sole owner, regularly set aside time to document the company’s significant events and decisions. Doing so will provide additional evidence that you and your business are separate and should be treated as such, protecting you from liability for the company’s debts or obligations.

What should meeting minutes include?
When you are drafting organizational minutes, you should ensure that the following key elements are included:
● Names of the attendees
● Date of the meeting
● Location of the meeting
● Agenda topics
● Decisions made
● Voting and outcomes
● Action items and parties responsible for carrying them out

At the end of the document, ensure that a company representative (a member of an LLC or a shareholder of a corporation) signs and approves the minutes. Because meeting minutes often include standard items, many individuals develop a template for the company to use at each meeting. After the minutes have been drafted, keep them in a safe and accessible place. For corporations, state laws typically require safekeeping for minutes, as well as easy access for shareholders.

Call Our Office
If you own a corporation or LLC and need help getting organized and complying with your state’s ongoing maintenance requirements, call our office today to set up an appointment. Our team of dedicated attorneys will help you identify the rules you need to comply with and guide your organization in carrying out the steps necessary to protect your business.

Five Reasons to Protect Your Retirement Accounts Now

Your retirement account provides asset protection during your lifetime, but as soon as you pass that account to a loved one, that protection evaporates. When your spouse, child, or other loved one inherits your retirement account, creditors have the power to seize it and use the funds to satisfy their claims. This means one lawsuit and POOF!—your life-long, hard-earned savings could be gone. Your loved one could be left penniless. Fortunately, there is a solution to this problem. A special trust called a standalone retirement trust (SRT) can protect inherited retirement accounts from your beneficiaries’ creditors.
You want your loved one to benefit from your retirement account, not the creditors. If you or your beneficiaries fall into any of these five categories, you should seriously consider using an SRT to protect your retirement accounts:

1. You have substantial combined retirement plans. Loved ones can use an SRT to shield the retirement plans from creditors.

2. You believe your beneficiary may be less than frugal with the funds. You should consider an SRT if you are concerned about how your beneficiary will spend an inheritance, as you can provide oversight and instruction on how much they receive and when.

3. You are concerned about lawsuits, divorce, or other possible legal actions. If your beneficiary is part of a lawsuit, is about to divorce or file for bankruptcy, or is involved in any type of legal action, a properly drafted SRT can protect the inherited retirement accounts from those creditors.

4. You have beneficiaries who receive assistance. If a beneficiary receives, or may qualify for, a needs-based governmental assistance program, it is important to know that inheriting an individual retirement account may cause the beneficiary to lose those benefits. An SRT can be drafted to avoid disqualification.

5. You are married with children from a previous marriage. If you are married and have children from a previous marriage, naming your spouse as the primary beneficiary of your retirement account could allow your spouse to intentionally (or unintentionally) disinherit your children, even if you named your children as the contingent (backup) beneficiaries on the account. You can avoid this by naming your spouse as the lifetime beneficiary of an SRT and then having the remainder pass to your children from a previous marriage after your spouse’s death.

You have worked hard to protect and grow your wealth–let’s keep it that way.
You worked hard to save the money in those retirement accounts, and your beneficiaries’ creditors should not be able take it from them. Give us a call and let us show you how an SRT can help you protect your retirement accounts.

The Estate Planning Tool Kit for Unmarried Partners

Estate planning is essential for everyone, but it is especially important if you and your partner are in a long-term committed relationship and are not married. Unless you plan properly, your partner will not receive any of your money or property when you pass away and will be unable to care for you when you most need it. Instead of your partner, your family members will be in charge of your financial and medical decisions and will receive your money and property upon your death. To ensure that you give money, property, and decision-making authority to those you want to have them, your estate planning tool kit must be properly stocked. In particular there are seven important documents you should consider when discussing your plans with an experienced estate planning attorney.

Last will and testament. You can use this document, also known as a will, to leave money and property to anyone you choose. A will names an executor or personal representative to wind up your affairs and lists what should happen with your money and property. However, a will must still go through the time-consuming, expensive, and public probate court process. If you want someone such as your partner or a minor child to receive money over a period of time, the court may stay involved until the last amount is paid, which could take years. Though court oversight may not be ideal for every situation, it can be beneficial, especially if you leave your family members less than they would have been entitled to under state law or if you have substantial claims from creditors.

Revocable living trust. A revocable living trust (RLT) is a trust you create during your lifetime that can be changed at any time before your incapacity or death. This planning tool enables you to name yourself as the current trustee (the person or entity who manages, invests, and hands out the money and property) and to designate a co-trustee or alternate trustee if you are unable, for whatever reason, to act as trustee. You can allow your partner to manage the trust with you or to step in when you cannot. On the other hand, if you prefer, you can select another trusted individual or professional entity to manage the trust on your behalf.

An RLT allows you to continue enjoying your money and property during your lifetime and to designate what will happen to them upon your death or incapacity. If you are financially contributing to both your and your partner’s day-to-day expenses, an RLT may be an effective way to ensure that your partner can continue to meet any financial obligations regardless of what happens to you. Also, we can include special language in your RLT to make sure that any money or property you leave to your partner is both protected from your partner’s creditors and out of a new significant other’s reach.

If your partner is not the only loved one you would like to provide for, an RLT can provide money and property to your partner for your partner’s lifetime, and any remaining amounts can be given to someone else, such as children from a previous relationship or marriage. Because an RLT can exist for many years, the fact that it will not have to go through probate is a valuable benefit. Instead of having court oversight for decades, depending on the age and health of your partner, these matters can be handled privately by your chosen decision makers.

Pour-over will. This special type of will specifically lists your RLT as the beneficiary. Although the intent of having an RLT is to avoid probate, we do not have a crystal ball to foresee every possible situation that could occur. If we come across accounts or property that were not transferred to your trust during your lifetime, making probate necessary, a pour-over will ensure that those accounts or pieces of property transfer to your trust at your death and go to those individuals or charities you have named in your trust document.

Financial power of attorney. This document allows you to choose a trusted person (an agent or attorney-in-fact), such as your partner, to handle financial matters for you. The scope of your agent’s authority is determined by the type of financial power of attorney that is prepared. The power can be as limited or as broad as you like. Another important consideration for a financial power of attorney is the specific time when your agent can act. You can have your agent act either immediately or only after you have been deemed unable to manage your affairs. The process for making this determination can be outlined in the document. In addition, consider making the financial power of attorney durable so that your agent’s authority can continue even if you become incapacitated. You have the right to choose who handles financial transactions on your behalf. If you do not choose and someone needs to step in, a judge will decide for you and, depending on your state’s statute, could choose a family member over your partner.

Medical power of attorney. This document allows you to appoint a trusted person, such as your partner, as your decision maker to communicate or make your healthcare decisions if you cannot. If you do not formally select a decision maker, your loved ones will face going to court to have a judge appoint someone to make these decisions. Depending on your state’s statute, the judge may have to select one of your blood relatives instead of your partner.

Advance directive or living will. This document, known by either name depending on your state, allows you to convey your wishes regarding end-of-life decisions. Because these topics can be very sensitive, it is important that you carefully consider your wishes. Although it may take some soul-searching, you must know what you want to happen in certain situations so your wishes can be properly documented and communicated to your partner as the medical decision maker and to your other loved ones if you wish. Absent specific instructions from you, your partner, as decision maker, will be left trying to figure out what you want. This difficult situation can not only cause additional grief, it may also breed disagreement between your partner and your other loved ones if opinions differ about how to best care for you.

HIPAA authorization form. This form allows you to grant specific individuals access to your medical information (e.g., to get a status update on your condition or receive your test results) without giving those individuals the authority to make decisions on your behalf. By providing information to your loved ones, you can help quiet the anxieties and uncertainties that often arise during times of emergency. This document can also help alleviate tensions between your partner as the medical decision maker and the rest of your loved ones. Although only your partner will be making medical decisions, your other loved ones will understand the reasons for those decisions.

Let Us Build Your Tool Kit Today
The future is always uncertain. Now is the perfect time to meet with us so we can build or upgrade your estate planning tool kit. Give us a call today to schedule an in-person or virtual consultation, whichever is most convenient for you.

COVID-19 Relief Updates for Small Businesses

Although some states have eased COVID-related restrictions on small businesses, many businesses are still struggling.

The Internal Revenue Service (IRS) and the Small Business Administration (SBA) continue to issue guidance for small businesses that seek to benefit from the COVID-relief legislation passed in 2020.

In addition, the American Rescue Plan Act, the new stimulus legislation signed into law by President Biden on March 11, 2021, provides additional funding for the Paycheck Protection Program (PPP) as well as aid for certain business sectors that have been particularly hard-hit by the COVID-19 pandemic.

IRS Extends Tax Filing and Payment Deadline

On March 17, 2021, the IRS announced that the federal filing and payment deadline for individual taxpayers, including those who pay self-employment tax, has been extended to May 17, 2021, due to the challenges and unique circumstances surrounding the COVID-19 pandemic.

The extension does not apply to estimated tax payments due on April 15, 2021.

Victims of February winter storms in Texas, Oklahoma, and Louisiana still have until June 15, 2021, to file individual and business tax returns and make payments as announced by the IRS earlier in March.