Legal Secretary's Knowledge of Wills and Power of Attorney

Introduction

Wills and power of attorney designations are frequently encountered in law offices. Both of these documents are sensitive and must be handled carefully. This article offers the basics of both. The laws, requirements, and particulars of these documents will be dictated largely by the state in which the client resides. Laws vary in regard to what makes either of these documents legal and binding. This article will cover some of the basics of wills and power of attorneys.

Will Basics

A will is a document spelling out what is to be done with the belongings of a person, termed a "testator," after he or she has died. Wills of this type also are referred to as a "last will and testament." This document has no force while the person is alive and may be altered or revoked at any time. It becomes applicable upon the testator's death to whatever the conditions of the estate are at the time of death. A will is only effective at death. Wills can be drawn by any attorney with a license to practice law. Wills also may be drawn by individuals on their own and notarized by a notary public. Attorneys often are sought out for these documents, particularly when there are many assets to be divided upon death.

Once a will is drawn by the client and attorney, and you have typed up and printed said document, it should be reviewed by the client for verification and approval before being filed. Verification of a will needs only the client's approval and the attorney's signature verifying mental competency in front of two non-bequeathed witnesses for it to be legally binding. You may be asked to be a witness to the signing of wills for clients. Wills may be quite simple or very complicated, depending on the extent of the estate in question.

Wills usually are printed on legal-sized paper and should not have any text following the signature of the testator. Upon the client's death, the will is read to all involved parties by the executor or the attorney, which is often one and the same. The executor may be a relative, a friend, a spouse, or life partner, or the attorney who drew the will and acted as legal adviser. An executor is simply the person named in the will who is responsible for seeing that its bequests and provisions are performed according to the testator's instructions.

Wills are delicate matters and can be an emotional procedure for a client. For some clients, the drawing of a will is simply a fact of life that must be taken care of and forgotten about once formalized. In any event, the decision as to what to do with one's assets upon death is weighty and requires serious thought and planning. Some wills will include instructions as to where minor children are to live and by whom they are to be cared for in the event of both parents' death or if there is only one custodial parent. This brings even more weight into the process of creating a will.

Living Wills

A living will is a document signed by an individual directing the manner in which he or she wishes to be medically treated if in a vegetative or terminal state. It is designed to give guidance to loved ones and health care providers as to the desires of an individual if he or she is no longer able to properly communicate them. Living wills often are drawn by those who are aware of a terminal illness; however, many clients have a living will created along with their last will and testament as a matter of course.

Living wills may be drawn at any time, even while a client is under the care of a hospital or hospice, as long as the person is considered mentally competent to make decisions regarding her or his health. If a power of attorney has been named prior to a client's hospitalization, that person has the power to make medical decisions, such as approving a "do not resuscitate" order. This order simply instructs medical personnel that no extreme measures should be taken to save the person's life in the event of physical distress so extreme that death is imminent. As with last wills, living wills are delicate matters and should be handled with discretion, consideration, and respect.

Power of Attorney Basics

Power of attorney is a written instrument whereby someone is granted the right to perform certain acts as the agent of the grantor; in other words, that person acts on the grantor's behalf. Power of attorney may be granted to a family member when the grantor has lost the capacity to take care of certain financial matters because of age, illness, or accidental injury. Lawyers often act as a client's power of attorney, at the client's request, and carry out financial duties on the client's behalf. While not legally required, power of attorney is often drawn up officially by an attorney.

A document is created stating who the power of attorney is for whom, what the designee's duties are, and in what regard that person is to act on behalf of the grantor. Some of the duties a power of attorney may perform include paying bills, depositing income, running a business, or managing a household. The so-named power of attorney is not to use the grantor's personal assets for his or her own gain or personal enjoyment; they are not given the power to sell assets without permission, unless this is specified in the legal documentation.

Using Discretion

As with all clients' legal matters, wills and power of attorney documents should not be discussed with outside parties or even those who are named in the will. Family members often may be tempted to ask questions about a will. It is strictly prohibited for you to discuss such matters with anyone other than the client. Direct any of those with questions to the attorney and advise those inquiring that it is not in your power to disclose personal information under any circumstances or to provide them with a copy of the will or power of attorney unless instructed to do so directly by your boss. Also, do not attempt to advise a client as to decisions regarding her or his will or other affairs.

Will Changes

Changes to a will often are referred to as a codicil. A codicil is a supplement or an addition to a will. It may explain, modify, add to, subtract from, qualify, alter, restrain, or revoke provisions in the existing will.

It is a matter of fact that people often will change their wills during the course of several years. At times, this is because of changing circumstances, such as a change in financial status, a death or birth in the family, or some other situation that requires a revision. Other times it will be at the mere whim of the client. Perhaps a favored child, niece, nephew, or other relative falls out of favor, or the client simply changes his or her mind in regard to bequeathing assets to any particular person previously named. Regardless of the reason, will changes must be handled by the attorney for them to be legally valid. As with the initial drawing of a will, the changes should be typed, printed, and reviewed by the client before filing. As with initial wills, changes are to be witnessed by two non-bequeathed individuals. The same discretion should be used with will changes as with initial wills.

Conclusion

Wills and power of attorney documents must be handled with the utmost discretion. Keep in mind that the drafting of these documents may be highly charged emotionally and that the contents are under the strictest confidence. Be sure that you never share information with beneficiaries, even if they are adamant in asking. Pass all questions and concerns family may have to your attorney. As with the drafting of an original will, will changes must be witnessed by two non-bequeathed parties to ensure that they are deemed legally binding.

Sole Proprietorship, Partnership, and Incorporation Formation

Introduction

The forming of businesses is a large part of legal work. Whether the firm is small, medium-sized or large, you will surely encounter sole proprietorship, partnership, and incorporation formation at some juncture in your career. While partnerships and sole proprietorships may be created without the assistance of an attorney, incorporation formation is rarely done without legal assistance. Thus, you will encounter corporation formation more often than other types of business formation. Below are some basic guidelines concerning the various types of business creation. Be sure to study the differences between the various types and pay special attention to the information offered on incorporation. While the legal forms, contracts, required data, and fees will vary from state to state, the basic information of business type will not vary. Understanding each option will help you tremendously when you encounter these legal matters on the job.

General Partnership or Partnership. A partnership is a voluntary joining of two or more persons to jointly carry on and profit from a single business. A partnership is presumed to exist if the persons have agreed to proportionally share the losses and profits from that enterprise. In civil law systems, a partnership is a nominate contract between individuals who, in a spirit of cooperation, agree to carry on an enterprise; contribute to it by combining property, knowledge or activities; and share its profit. Partners may have a partnership agreement, or declaration of partnership; and,in some jurisdictions, such agreements may be registered and available for public inspection. In many countries, a partnership also is considered to be a legal entity, although different legal systems reach different conclusions on this point. A partnership can be formed by two or more people.

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Limited Partnership. A limited partnership comprises one or more people in charge of the business who are personally responsible for the debts of the partnership, They also are known as general partners. Limited partners are one or more people who provide capital and share in the profits but who do not manage the business and are responsible only for the amount of their contribution.

Limited Liability Partnership (LLP). A limited liability partnership has many of the same elements of partnerships and corporations. In an LLP, all partners involved have a limited liability responsibility, which is similar to that of shareholders in a corporation. The difference is that partners have the right to manage the business directly, and at a different level of tax liability than in a corporation, which is why this type of partnership is chosen over incorporation. LLPs are different from limited partnerships, in that limited liability is granted to all partners, not just to the non-managing "limited partners." LLPs are best for forming businesses in which all investors' desire taking a hands-on role in the management of the company. Each state has its own laws governing the formation of LLPs, thus, contacts and requirements will be dictated strictly by the state in which this type of partnership is being formed. LLPs are the most popular method of organization among attorneys, accountants, architects, and other professional groups.

Incorporation. Incorporating is the process of forming a business corporation. Incorporating also may include the merger of two existing companies into one new company. Incorporation is the most common business formation type and often will utilize the services of a lawyer or law firm. The main benefit of choosing to incorporate a business rather than forming a partnership or sole proprietorship is to protect the personal assets of the owners. The corporation is considered a separate entity from those who act as shareholders or managers. Other benefits of incorporating include:

easy ownership transference;
taxation at a lower rate than individuals;
the ability to raise funds by selling stock;
a credit rating that is created and built separately from that of the owners.If the owners have bad credit, the corporation still may build its own separate good credit because it is treated as an individual in its own right.

Sole proprietorships and partnerships often move into incorporation when the business has become successful.

There are three important steps that must be taken when a new corporation is started:

A corporation name is chosen. Corporation names have three parts: the distinctive element, the descriptive element, and the legal ending. For instance, in the company name Champion Sports, Inc., "Champion" is the distinctive element, "Sports," is the descriptive element, and "Inc." is the legal ending.
The Articles of Incorporation are filed. (see below) The articles of incorporation list the purpose of the corporation, the principal place of business, and the number and type of shares of stock. A registration fee is paid at this time and, depending on the state in which it is formed, ranges from $25 to $1,000.
Corporate bylaws are filed with the state of incorporation. The bylaws present details such as shareholder meeting schedules, voting privileges of shareholders, special meeting schedules, etc.

Articles of Incorporation. Also referred to as the Certificate of Incorporation and/or a Corporate Charter, these are the rules that outline the management of the corporation that are filed with the state. The Articles of Incorporation must be filed in order for a corporation to be formed. They include some or all of the following:

the unique, three-part corporation name;
the name of the incorporator(s), or any and all persons forming the corporation;
the stock or non-stock designation (stock corporations are usually for-profit, while non-stock are usually nonprofit);
permanent or limited designation;
establishment of nonprofit status for tax purposes;
the number of shares that will be issued if the entity is a stock corporation;
the names and contact information of the designated board of directors;
the physical location of the corporation's registered office for delivery of legal papers and the name of the person to whom papers should be addressed who is not the incorporator.

Sole Proprietorship. This type of business is created and carried out by a single person that is not a corporation or trust. It differs from a corporation in that the business is not a separate entity and its taxes are paid directly by the proprietor. It does not offer strong protection of the individual's assets and often may create tax liability.

Conclusion

While not always necessary, lawyers often are retained to handle the creation of sole proprietorships, partnerships and corporations. Incorporating is an involved process and, thus, is most often handled by an attorney. In many cases, the attorney who handles the legal aspects of creating a company will often be the attorney who represents the company throughout its life. The process for all of these business formations will vary according to state law and, thus, the paperwork required, fees paid, and Articles of Incorporation will vary according to jurisdiction. Be sure you understand the differences between the various types of business formation discussed in this article and, in particular, are clear on the aspects of incorporation.