Erik Alicea, Author at KEYTLaw

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So far Erik Alicea has created 14 blog entries.

Understanding Trusts: A Comprehensive Guide to Protecting Your Assets and Legacy

Trusts play a crucial role in estate planning, helping individuals protect their assets, provide for loved ones, and ensure that their wealth is managed according to their wishes. Whether you're creating a revocable trust for flexibility during your lifetime or an irrevocable trust for asset protection, understanding the different types of trusts is essential for making informed decisions.

At KEYTLaw, we help clients navigate the complexities of trust creation, ensuring that their assets and families are protected. Here, we'll explore the different types of trusts, their purposes, and how they can benefit you.

What Is a Trust?

At its core, a trust is a legal contract between three parties:

Trustmaker: The person who creates the trust and places assets into it. Also known as the grantor, settlor, or trustor.
Trustee: The individual or entity responsible for managing the assets placed in the trust. The trustee must act in the best interest of the beneficiary and follow the terms laid out in the trust agreement.
Beneficiary: The person or entity who benefits from the assets held in the trust. The trustee manages the trust according to the beneficiary's needs and the trustmaker’s instructions.

Revocable vs. Irrevocable Trusts: What’s the Difference?

One of the first decisions you’ll need to make when creating a trust is whether to establish a revocable or irrevocable trust. These two types of trusts serve different purposes and offer varying levels of flexibility and protection.

Revocable Trust:
A revocable trust can be amended or revoked by the trustmaker during their lifetime. This flexibility makes it a

7 Warning Signs of Online Wills and Trusts & Why You Should Avoid Them

Creating a will or trust is one of the most significant things you can do for your loved ones. With your estate's future at stake, it may be tempting to go the quick-and-easy route by just using an online template. However, like most shortcuts in life, it comes with risks that can lead to unwanted surprises for you and your family.

Below, we’ll explore seven key reasons why using online sites and DIY forms for wills and trusts can be a risky decision!

1. One Size Does Not Fit All

When it comes to estate planning, cookie-cutter solutions simply don’t work. Online forms try to simplify the process with a generic template, but life is rarely so straightforward.

Your family situation might be complex. You may have blended families, dependents with special needs, or estranged relatives.
Personal dynamics often require nuanced decision-making, which online platforms aren't equipped to handle.

In contrast, an experienced estate attorney takes the time to understand your specific needs, ensuring your documents are drafted with all of your unique circumstances in mind. A successful plan is always tailor-made, not pulled off the virtual shelf.

2. Legal Requirements Are Not Always Simple

Different states have different laws, and estate planning is highly jurisdictional. What might be acceptable in one state could be completely invalid in another. DIY will sites generally provide a one-size-fits-all document and often lack updated information regarding:

Changes in state laws
The requirements for signing or witnessing documents
Nuances around specific assets, like property in another state or digital assets

Failure

How an LLC Can Protect Your Business and Personal Assets: What You Need to Know

Whether you're just starting a business or have been operating one for years, understanding how to protect your personal assets is crucial. One of the most effective tools for shielding yourself from liability is the limited liability company (LLC). However, while forming an LLC provides a significant layer of protection, that shield can be lost if the LLC is not properly managed.

This blog will explain how LLCs work, what the legal concept of “piercing the corporate veil” means, and why you should avoid putting certain assets—like your personal residence—into an LLC.

What Is an LLC and Why Is It Important?

A limited liability company, or LLC, is a legal entity designed to separate your personal assets from your business assets. This separation is important because it means that if your business is sued, only the assets owned by the LLC are at risk—not your personal savings, home, or other private assets. Without an LLC, your business would operate as a sole proprietorship, leaving your personal assets fully exposed to creditors in the event of a lawsuit.

Question: What exactly does the LLC protect?

An LLC protects its members by creating a legal distinction between the individual owners (or members) and the business itself. If the LLC is properly managed, only the company's assets are at risk in a lawsuit. This includes things like business accounts, inventory, equipment, and any other property owned by the LLC. Your personal bank accounts, real estate, and investments remain protected.

The Risk of Piercing the Corporate Veil

While forming an LLC offers significant protection, that protection can be lost if the LLC is not managed correctly. A legal concept known as “piercing the

The Importance of Succession Planning and Operating Agreements for LLC Owners

Forming an LLC offers critical protections for business owners, but the work doesn’t stop there. To ensure your LLC runs smoothly—and avoids potential conflicts—having a comprehensive operating agreement and a succession plan is essential. These documents safeguard your business from internal disputes and provide clarity in the event of an owner's death or departure.

What is an Operating Agreement and Why Is It Important?

An operating agreement is a legally binding document that outlines the rules and structure of the LLC, as well as the rights and responsibilities of each member. Without an operating agreement, the business may fall back on state law to resolve disputes, which may not always align with the owners’ intentions.

For example, in Arizona, if an LLC has multiple members but no operating agreement, the state’s default law dictates that all members are equally entitled to profits, losses, and distributions—regardless of the amount of capital each has invested. This can lead to disputes if one member believes they deserve a greater share due to their larger financial contribution. A well-drafted operating agreement can prevent these types of conflicts by clearly defining ownership percentages and decision-making authority.

Avoiding Litigation with a Clear Operating Agreement

Disputes between LLC members can arise over various issues, from profit sharing to decision-making power. Without an operating agreement in place, these disagreements could result in costly litigation, as members turn to the courts to resolve disputes.

A comprehensive operating agreement helps avoid this by clearly laying out the procedures for resolving conflicts. For instance, it might include provisions for arbitration or mediation, as well as guidelines for handling deadlocks in decision-making. By setting these rules in advance, LLC members can focus

Why Forming an LLC is Essential for Protecting Personal and Business Assets

Starting a business comes with many risks, but forming an LLC (Limited Liability Company) can provide critical protection for both personal and business assets. For entrepreneurs, understanding the role of an LLC is essential for minimizing liability and ensuring long-term financial security.

The Difference Between Sole Proprietorships and LLCs

Many small business owners begin as sole proprietors, where the business and the owner are legally the same entity. This structure is simple, but it leaves personal assets—like your home or savings—vulnerable to business liabilities. If something goes wrong with your business, such as a lawsuit or debt, creditors can go after your personal property to satisfy the claims.

On the other hand, an LLC creates a legal distinction between the business and its owner(s). By forming an LLC, the business itself becomes liable for its debts and legal obligations, while the owner's personal assets are protected. This separation is crucial, especially in industries where legal risks are higher.

Protecting Personal Assets from Business Risks

One of the main reasons to form an LLC is to shield your personal assets from business-related risks. If your LLC is sued, only the assets owned by the company are at risk—not your personal belongings. For example, if you own a restaurant and a customer files a lawsuit due to an injury on your property, the LLC will be the defendant in the case, not you personally. This protection can make the difference between financial ruin and staying secure through a legal challenge.

Additionally, having an LLC can protect your business assets from personal liabilities. For example, if you’re in a car accident that results in a lawsuit, the assets owned by your LLC are

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