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Understanding Child Custody Agreements and Orders: What You Need to Know

by Spencer Wingert, Associate Attorney

Introduction

Child custody agreements are legal documents that outline the rights and responsibilities of parents or guardians regarding the care, custody, and visitation of their children after a divorce or separation. These agreements are crucial for ensuring the well-being of the children involved and providing clarity for both parents. In this blog post, we’ll explore what child custody agreements are, why they are essential, and how they are typically structured.

In the event the parties cannot reach an agreement, the court will issue an order containing the same terms outlined below.

What Is a Child Custody Agreement?

A child custody agreement, also known as a parenting plan or custody order, is a legally binding document that specifies how parents will share the responsibilities of raising their children. It addresses several key aspects of child custody, including:

  1. Legal Custody: Legal custody pertains to decision-making authority for important matters such as education, healthcare, religion, and extracurricular activities. It can be jointly assigned to both parents, which is the standard in Wisconsin, or solely granted to one parent which is exceptionally rare. In some instances joint legal custody may be granted, but with decision making on specific topics, such as medical, granted to one parent.
  1. Physical Placement: This defines where the child will live and the schedule for visitation by the non-custodial parent. It can shared, exclusive to one parent, or somewhere in between. There are a wide range of possibilities that the respective parties could agree to, or the court could order. The placement schedule typically includes holiday scheduling, vacation terms, and distinguished schedules between the school year and the summer months.
  1. Child Support: Child custody agreements often include provisions for child support, outlining how financial support will be provided for the child’s needs. Child support is calculated based off the percentage of placement of the parties, and in instances of a shared placement schedule, the income of the respective parties is also used.
  1. Communication: It may specify how parents will communicate with each other about the child’s well-being and any significant decisions. In some circumstances, communication between the parties may be limited to only communication necessary for the exchange and care of the children.
  1. Dispute Resolution: In case disagreements arise, the agreement may provide guidelines for dispute resolution, such as mediation or seeking legal counsel.
  1. Modification Procedure: In some situations, the parties may agree to specific terms for modifying the agreement if circumstances change, such as a parent’s relocation or a child’s evolving needs.

Why Are Child Custody Agreements Important?

  1. Child’s Best Interest: The primary focus of any custody agreement is the well-being and best interests of the child. These agreements help ensure stability and a consistent environment for the child, even when parents are no longer together.
  1. Clarity and Predictability: Child custody agreements provide clear guidelines for both parents, reducing conflict and uncertainty. Knowing their respective roles and responsibilities helps parents cooperate more effectively.
  1. Legal Protection: A formal custody agreement offers legal protection to both parents. It ensures that each parent’s rights and responsibilities are legally recognized and enforceable.
  1. Minimizing Disputes: Having a well-defined agreement can help prevent future disputes and disagreements between parents, fostering a more amicable co-parenting relationship.

Conclusion

Child custody agreements are essential documents that provide a framework for co-parenting after divorce or separation. They prioritize the child’s best interests, promote cooperation between parents, and offer legal protection for everyone involved. Crafting a well-thought-out custody agreement is a vital step toward ensuring a stable and nurturing environment for children during challenging times. It’s often advisable to seek legal counsel when creating or modifying a child custody agreement to ensure it complies with local laws and adequately addresses the unique needs of your family. Once a child custody and placement order has been put in place, either by order of the court, or by stipulation of the parties approved by the court, modification can be incredibly difficult. As this is just a general discussion of custody and placement agreements or orders, legal counsel may be necessary to understand the complexities of the process or your unique situation. Contact Russell Law Offices for a consultation today!

Navigating the Divorce Process in Wisconsin: A Comprehensive Timeline

by Spencer Wingert, Associate Attorney

 

Introduction

Divorce can be a challenging and emotionally taxing experience. Understanding the timeline for a divorce in Wisconsin can help you prepare for what lies ahead and make the process as smooth as possible. While every divorce case is unique, this blog post will provide you with a general overview of the key stages and approximate timeframes involved in obtaining a divorce in the state of Wisconsin. Please keep in mind that the time frame estimates are just that, and that no attorney can guarantee the court’s timeliness, or that of opposing counsel.

Requirements Before Filing

Before filing for divorce in Wisconsin, you or your spouse must meet the state’s residency requirements. At least one of you must have lived in Wisconsin for at least six months before initiating the divorce proceedings. Additionally, you must reside in the county where you plan to file for at least 30 days.

1. Filing the Petition (1-2 Days)

The divorce process in Wisconsin typically begins with one spouse filing a Petition for Divorce in the county where either spouse resides. The process starts when the petitioner (the spouse initiating the divorce) submits the necessary paperwork to the court. This step is completed when the paperwork has been submitted.

2. Serving the Divorce Papers (1-2 Weeks)

After filing the petition, the petitioner must serve the divorce papers to the other spouse. This can be done through certified mail, a process server, or even by the other spouse voluntarily accepting the documents. The response time can vary, but it generally takes 1-2 weeks for this step to be completed. If service cannot be completed by traditional means, your attorney can assist you in accomplishing service by other court approved ways.

3. Response and Counterclaim (Varies)

Once served, the respondent (the other spouse) has a set amount of time, typically 20 days, to respond to the petition. If the respondent wishes to contest the divorce or make counterclaims, this can extend the timeline of the entire divorce considerably, potentially adding several months to the process.

4. Temporary Orders (1-3 Months per Hearing)

In cases involving child custody, support, or spousal maintenance, or disputes regarding property and bank accounts, the court may issue temporary orders while the divorce is pending. These orders are intended to establish a framework for financial support, visitation, and other matters during the divorce process. Resolving temporary orders can take 1-3 months, depending on court scheduling and the complexity of the issues involved. There may be multiple temporary order hearings depending on the case. These orders ensure that both parties’ rights and responsibilities are protected while the divorce is pending.

5. Discovery (2-6 Months)

Discovery is the process during which both parties exchange information relevant to the divorce, such as financial documents, property records, and witness statements. The duration of this stage varies depending on the complexity of the case and the willingness of both parties to cooperate. Both parties are required to file documentation, such as Financial Disclosures, but if other information is sought by either party, this can be accomplished either through cooperation or through discovery tools.

6. Mediation or Settlement Negotiations (Varies)

Many divorce cases in Wisconsin are resolved through mediation or settlement negotiations. The duration of these negotiations varies widely depending on the parties’ willingness to compromise and the complexity of the issues. It can range from a few weeks to several months. If there is a child custody or placement dispute, one session of mediation is mandated by law with few exceptions.

7. Trial (6-12 Months)

If a divorce case cannot be settled through negotiation or mediation, it may proceed to trial. Trial scheduling can be a lengthy affair, with various deadlines extending the length of the case beyond 6 months to a year. The trial itself is typically a 1-2 day event, with the court scheduling time based on the complexity of the case. During the trial, both sides present evidence and arguments to a judge who will make the final decisions on contested issues. Trials can be emotionally draining and costly, so it is generally advisable to explore alternative dispute resolution methods first.

8. Finalizing the Divorce (Varies)

After a trial, or if the parties reached a Marital Settlement Agreement, the parties’ marriage is officially dissolved the date of the hearing. Afterwards final documents will be submitted with the terms of the divorce.

Step 9: Post-Divorce Matters (Varies)

Even after the divorce is finalized, there may be post-divorce matters to address, such as modifying child custody or support orders or enforcing court orders. It’s crucial to keep communication lines open and work together for the well-being of any children involved. If agreements cannot be reached, legal counsel is recommended to navigate the court process.

 

Conclusion

Navigating the divorce process in Wisconsin can be a time-consuming and emotionally draining journey. The timeline provided here is a general overview, and the actual duration of your divorce may vary. Please note that the statutory minimum time that must pass before a final divorce hearing will be scheduled is 120 days from the successful service to the opposing party. It’s essential to work with an experienced family law attorney who can guide you through the process, help you make informed decisions, and advocate for your rights. Additionally, seeking emotional support and counseling during this challenging time can be invaluable. Remember that while the divorce process can be difficult, it is a step toward a new chapter in your life, and with the right guidance, you can navigate it successfully.

Contact Russell Law Offices for a consultation regarding your divorce process!

Navigating the Social Security Disability Benefits Denial: What Happens Next with an Attorney

by Vincent Hein

 

Introduction

Receiving a denial for Social Security Disability (SSD) benefits, whether it be Social Security Disability Income (SSDI) or Supplemental Security Income (SSI), can be frustrating. However, it’s important to remember that an SSDI or SSI denial is not the end of the road. Many applicants who initially get denied Social Security Disability benefits find success by seeking the assistance of an experienced social security disability attorney to guide them through the disability appeals process. In this blog post, we will explore what steps to take after a denial of SSD benefits and how an attorney can help you secure the SSD benefits you deserve.

Understand the Denial Letter

When you receive a social security disability denial letter from the Social Security Administration (SSA), it’s essential to carefully review it. The letter should provide specific reasons for the denial, such as medical documentation, work history, or income-related issues. Understanding why your claim was denied is the first step in addressing the issue.

Contact a Social Security Disability Attorney

One of the most important steps to take after a denial is to consult with an SSD attorney. These legal professionals specialize in SSD cases and have a deep understanding of the complex application and appeals process. They can help you assess the strength of your case, identify the reasons for denial, and plan your next steps.

File an Appeal

After you’ve been denied SSD benefits, with the assistance of your attorney you’ll typically file an appeal within the SSA’s specified timeframe. There are several levels of appeal, including:

  1. Request for Reconsideration: This involves a review by a different SSA examiner who did not participate in the initial decision. Reconsideration reviews nearly always agree with the prior review and odds are very high you will be denied again.
  2. Administrative Law Judge (ALJ) Hearing: If your claim is denied again during reconsideration, you can request a hearing before an ALJ. Your attorney will prepare your case and represent you at the hearing. National averages show that historically ALJ’s approve approximately 43% of cases before them, but that number in 2022 was around 54%. Who you get as a judge will be very important.
  3. Appeals Council Review: If the ALJ denies your claim, your attorney can request a review by the Appeals Council. They will assess whether the ALJ made any legal errors. A full reversal by the Appeals Council is very unlikely. Generally, if you win here, your cases is simply remanded back to the same judge you had before with instructions on what other legal considerations the ALJ needs to analyze because they never reviewed the first time they had the case. Approximately 1% of disability benefits cases heard by appeals council get approved. The remaining cases were either denied (84%), dismissed (3%), or remanded back to the ALJ level (12%).
  4. Federal Court Review: If all other options are exhausted, you can file a lawsuit in federal court with the assistance of your attorney. If this happens, you are now moving out of administrative courts to Federal (not state) District Courts.
  5. Start Over. If you have exhausted all of your appeal options, or if it makes sense to not appeal, your lawyer can advise if a new disability application is the correct path. Generally, this would occur after you went in front of an ALJ for a hearing or later in the appeals process.

 

Gather Supporting Documentation

Your attorney will work with you to gather any additional medical records, employment history, or other documentation necessary to strengthen your case. Ensuring that you have strong supporting evidence is crucial to a successful appeal.

Prepare for the Hearing

If your case reaches the ALJ hearing stage, your attorney will prepare you for the hearing process. They will advise you on what to expect, help you understand the questions you may be asked, and ensure you are well-prepared to present your case effectively.

Attend the Hearing

Your attorney will represent you at the ALJ hearing and present your case. They will advocate on your behalf, cross-examine any witnesses, and address any issues raised by the judge.

Await the Decision

After the hearing, you will need to await the ALJ’s decision. This can take several months. If the decision is favorable, you will begin receiving SSD benefits. If it is unfavorable, you can proceed with further appeals with the guidance of your attorney.

Conclusion

Navigating the process after a denial of SSD benefits can be complex and overwhelming, but you don’t have to go through it alone. Hiring an experienced social security disability attorney can make a significant difference in your chances of success. They will guide you through the appeals process, help you gather supporting documentation, and represent you effectively at hearings. Remember that persistence and proper legal representation can lead to the approval of your SSD benefits, providing the financial support you need during a challenging time. If you or a loved one needs assistance in filing an appeal for SSD, contact Russell Law Offices today!

The 5 Steps to Qualify for Social Security Disability

by Vincent Hein, Senior Attorney

Step 1: Do You Have Substantial Gainful Activity (SGA)?

In 2024, you have SGA if you make more than $1,550 gross income per month from wages, net of impairment-related work expenses, you are NOT disabled.

If you have SGA, you do not move on to step 2.

The $1,550 figure increases to $2,590 if you are blind.

Step 2: Are your physical and/or mental conditions severe?

For step 2, your conditions or impairments must be such that they interfere with basic work-related activities and are expected to last 12 months or more or result in death.

If you meet Step 2, then you move to Step 3. If you do not meet the requirements of Step 2, you are not disabled.

Step 3: Do you meet or equal a listing?

If you meet or equal a listing, you are disabled, and the analysis ends. An example of a listing is listing 1.15 “Disorders of the skeletal spine resulting in compromise of a nerve root(s).” The listing sets forth the requirements needed to meet it. If you do not “meet” the listing you still may “equal” it.

At Step 3, SSA will determine your residual functional capacity (RFC), which is what they consider to reflect your ability to lift, carry, sit, and stand.

If you do not meet or equal a listing, you move on to step 4.

Step 4: Can you perform any of your Past Relevant Work (PRW)?

Your PRW is any job you did within 15 years prior to your date of disability. Currently, SSA is working to reduce the 15-year period down to 5, which will be great for social security disability applicants.

For Steps 1 through 4, the burden is on the applicant to show they satisfy the requirements of those steps. If you meet all 4 Steps, you move to Step 5, and the burden shifts to SSA to show you could perform other jobs.

If you are 50 years old or older, there is another set of rules available at Step 4 called the grid rules or medical-vocational guidelines that make awarding social security disability easier for older workers.

Step 5: Are there other jobs available in the national economy you could do?

At this step, the government (SSA) must prove there are other jobs you could perform based on your residual functional capacity (RFC). The problem for applicants here is that SSA uses a very old resource called the Dictionary of Occupational Titles (DOT) which was supposed to be replaced by the O*Net. Here, SSA can cite such jobs as Tube Operator:

TITLE(s): TUBE OPERATOR (clerical) alternate titles: pneumatic-tube operator; tube clerk; tube dispatcher; tube-station attendant Receives and routes messages through pneumatic-tube system: Opens incoming pneumatic-tube carriers containing items, such as mail correspondence, bills, and receipts. Reads and sorts items according to department. Inserts items into carriers, and carriers into tube system, and routes to specified locations.
GOE: 07.07.02 STRENGTH: S GED: R2 M1 L2 SVP: 2 DLU: 77.

Do you know anyone who has this job? No, it’s a very unrealistic job as we simply don’t send things through pneumatic-tubes anymore, but it does still get cited by SSA. Lots of fights happen at Step 5.

If you can show the government has not met its burden at Step 5 and have made it past Steps 1 through 4, then you are disabled.

If you are interested in a free consultation with the attorneys at Russell Law Offices, S.C., call 608-448-3680. The consultation is free, you only pay if you win.

SSDI vs SSI: What is the Difference?

by Vincent Hein, Senior Attorney

Social Security Disability comes in two forms, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).

An important difference between SSDI and SSI is that SSI is for those applicants who did not have enough work quarters to qualify for SSDI. SSDI is ultimately better than SSI and will pay more per month than SSI. If you worked at least some of the time during each year for the 10 years prior to applying for disability, you will likely qualify for SSDI. One problem applicants run into is when they wait too long to apply for disability, and as a result are only eligible for SSI.

Another important difference between SSDI and SSI is that SSI is means tested. That means if you have too many assets, you will not qualify. For example, if you have more than $2,000, you are not eligible for SSI (Technically, you can have more than $2,000 some of the time, but by the last day of the month you must have $2000 or less).

The main similarity between SSDI and SSI is that the 5 Steps required to qualify for SSI or SSDI are the same:

Step 1: Do You Have Substantial Gainful Activity (SGA)?

Step 2: Are your physical and/or mental conditions severe?

Step 3: Do you meet or equal a listing?

Step 4: Can you perform any of your Past Relevant Work (PRW)?

Step 5: Are there other jobs available in the national economy you could do?

Of the two forms of social security disability, SSDI is better than SSI, and whether you qualify for SSDI depends on your work history.

If you would like to speak with an attorney at Russell Law Offices, S.C. about your case, please call 608-448-3680 for a free consultation. The consultation is free, and we only get paid if you win.

Beyond the Will: Essential Information to Secure for Your Loved Ones

by Nathan Russell, Owner and Managing Attorney

Creating a will is a vital step in ensuring that your assets and wishes are distributed as you desire after your passing. However, there is more to consider than just the contents of your will. To truly prepare for the future, it’s essential to gather and organize additional important information that will ease the burden on your family members during a difficult time. This extra planning is a huge benefit to your loved ones after you pass away.  Here are some key documents and information you should keep with your will:

  1. Financial Records: Gather records of your bank accounts, investments, insurance policies, and retirement accounts. Include contact information for financial advisors, account numbers, and login details for online accounts.

  1. Debts and Liabilities: List any outstanding debts, loans, or mortgages, along with account numbers and contact information for creditors. This will help your family understand and manage your financial obligations.

  1. Property and Real Estate Documents: Include deeds, property titles, and related documents for homes, land, and any other real estate you own. This will make it easier to transfer or sell these assets if needed.

  1. Healthcare Directives: In addition to your will, make sure you have an advance healthcare directive and a durable power of attorney for healthcare. These documents specify your medical wishes and designate someone to make healthcare decisions on your behalf if you become unable to do so.

  1. Digital Assets: Provide a list of your digital assets, including social media accounts, email accounts, and any online subscriptions. Include instructions on how to access or manage these accounts.

  1. Passwords and Access Codes: Maintain a secure list of passwords and access codes for your devices, online accounts, and digital assets. Ensure that your family knows how to access this information safely.

  1. Contact Information: Compile a list of important contacts, such as lawyers, financial advisors, doctors, and close friends. This will help your family reach out to those who can provide assistance or guidance.

  1. Funeral and Burial Preferences: Detail your preferences for your funeral or memorial service, including any prepaid arrangements. This will relieve your family of the emotional burden of making these decisions during a challenging time.

  1. Safe Deposit Box Information: If you have a safe deposit box, provide details, including location, access information, and an inventory of its contents.

  1. Letter of Instructions: Consider writing a letter to your loved ones with personal messages, final wishes, and any other guidance you wish to leave. This can provide emotional support and closure to your family.

Remember to keep these documents and information updated regularly and inform your family members or trusted individuals about their location. Storing them in a secure place, such as a home safe or with your attorney, is advisable.

By gathering and organizing these additional details alongside your will, you’ll help ensure that your family members have the information they need to navigate your affairs and carry out your wishes with confidence and ease during a challenging time. Preparing for the future is an act of love that can provide comfort and peace of mind to your loved ones.

It is never too early or too late to create your estate plan. Contact the attorneys at Russell Law Offices, S.C. to schedule a consultation to review your current will or create one for the first time.

Do you qualify for Social Security Disability?

by Vince Hein, Senior Associate Attorney

There are 5 sequential steps that get evaluated when determining if someone qualifies for social security disability. We will focus on the first 2, with an emphasis on Step 1, which has to do with your income from your work.

If you are looking to find out if you can get social security disability, read on. This article will show you the some of the knock-out questions that often trip people up when they are wondering if they may be eligible for social security disability.

Step 1: Is there Substantial Gainful Activity (SGA)?

In 2023, you have SGA if you make more than $1470 gross income per month you are NOT disabled, and you do not move on to step 2. For many people, if they have any job at all, they will not qualify for social security disability.

The $1470 figure is $2460 if you are blind.

If there is SGA, then you are not disabled, and the evaluation ends. If there is no SGA, then you move on to Step 2 of 5.

If you have no income from work, then you do not need to worry about Step 1 of the 5-step process.

Step 2: Is your physical and/or mental condition severe?

For step 2, your impairments have to interfere with basic work-related activities and be expected to last at least 12 months, or result in death.

If your impairments are not severe enough to last 12 months or more or they won’t result in your death, then you are NOT disabled. If your conditions are severe enough to last 12 months or more or result in your death, then you move to Step 3 of 5.

Steps 3 through 5 of the disability process are not covered in this article. The point of this article is to see if you can get past the knock-out questions that often prevent people from becoming eligible for social security disability.

 

Contact Russell Law Offices, S.C. today to see if you qualify for SSD.

 

 The consultation is free, and we only get paid if you win.

Navigating Estate Planning After Divorce

By Nathan Russell, Managing Attorney and Owner

Divorce is a challenging and emotionally taxing life event. Amid the turmoil of separating assets, making custody arrangements, and adjusting to a new chapter in life, it’s easy to overlook the importance of updating your estate plan. Yet, this is a crucial step to ensure your wishes are met and your loved ones are protected in the event of your passing. In this blog post, we’ll discuss what to do with your estate plan after a divorce.

 

Review and Revise Your Will

The first step in post-divorce estate planning is to review your will. If your former spouse was a beneficiary or executor in your will, it’s likely you’ll want to make some changes. It is important to note that Wisconsin law automatically removes a former spouse from your will and as a beneficiary of insurance policies immediately after the divorce.  However, to ensure your will accurately reflects your current wishes regarding asset distribution and guardianship for any children you should look to modify your will.

 

Update Beneficiary Designations

Review all your financial accounts and insurance policies, such as retirement accounts, life insurance, and bank accounts. Make sure to update the beneficiary designations on these accounts to reflect your new circumstances. Removing your ex-spouse as a beneficiary and designating new beneficiaries is essential to avoid unintended consequences.

 

Reevaluate Guardianship Arrangements

If you have minor children, you may have designated your ex-spouse as their guardian in your will. Post-divorce, you should consider naming a back-up guardian should your ex-spouse pass without leaving a named guardian.

 

Adjust Your Power of Attorney

Review and revise your power of attorney documents if your ex-spouse was granted authority to make financial or healthcare decisions on your behalf. Appoint a new person you trust for these responsibilities, as you see fit.

 

Revisit Your Healthcare Directives

Your healthcare directives, such as a living will or healthcare power of attorney, may need updating. Ensure your new wishes regarding medical decisions and end-of-life care are clearly documented.

 

Consider Trusts and Property Ownership

If you and your ex-spouse shared significant assets, consider how these assets are held. You may need to make changes to property ownership or establish trusts to protect your interests and ensure your heirs receive their intended shares.

 

Consult with Legal and Financial Professionals

Estate planning can be complex, and the laws vary by jurisdiction. It’s advisable to consult with an attorney experienced in estate planning to guide you through the process. Additionally, consider speaking with a financial advisor who can help you make informed decisions about your assets and investments.

 

Update Your Digital Assets

In our increasingly digital world, don’t forget to address your digital assets. Update your login credentials, passwords, and instructions for accessing online accounts, including email, social media, and financial accounts. Electronic devices that were once shared during marriage may still have passwords save on them after you are separated.  Ensure your heirs can manage these accounts as needed.

 

Communicate Your Changes

While not legally required, it’s often a good idea to communicate your estate plan changes to relevant parties. This can include your children, close family members, and anyone who has a role in your estate plan, such as the executor of your will or the guardian of your children.

 

Conclusion

Divorce is a life-altering event that necessitates significant adjustments in various aspects of your life, including your estate plan. By reviewing and revising your estate plan after divorce, you can ensure that your assets are distributed according to your wishes and that your loved ones are protected in the event of your passing. Seek professional guidance, communicate your changes, and take the necessary steps to secure your financial future and provide for your family as you see fit.  The team at Russell Law Offices, SC has the experience and knowhow to help you navigate this turbulent time.  Feel free to reach out for a consultation at any of our offices or by calling 608-448-3680.

Choosing the Right Entity for Your Vacation Rental: A Legal Guide for Hosts

by Nathan Russell, Owner & Managing Attorney

As the popularity of Airbnb and VRBO continues to soar, more and more people are capitalizing on the opportunity to earn extra income by listing their properties for rent. However, one crucial consideration that often gets overlooked is the choice of entity for your vacation rental business. Selecting the right legal structure is essential for protecting your personal assets, managing taxes efficiently, and ensuring long-term success. In this article, we will guide you through the process of choosing the ideal entity for your Airbnb venture.

Sole Proprietorship:

The simplest form of business entity is the sole proprietorship. It is a default structure where you conduct business as an individual without any legal distinction between your personal and business assets. While this may be the easiest option, it also exposes your personal assets to potential liability risks. If a guest were to file a lawsuit or your property incurs damages, your personal savings and possessions could be at stake.

Limited Liability Company (LLC):

The Limited Liability Company (LLC) is a popular choice among hosts. An LLC provides a clear separation between your personal and business assets, shielding your personal finances in case of any legal issues or debts. This structure offers flexibility in terms of taxation, allowing you to choose between pass-through taxation (similar to a sole proprietorship) or electing to be taxed as a corporation. Furthermore, an LLC offers a professional image and can enhance your credibility in the eyes of potential guests.

Corporation:

A corporation is a separate legal entity that offers the highest level of protection for personal assets. It shields your personal finances from business liabilities, making it an attractive option for hosts with multiple properties or those seeking substantial growth. A corporation has a complex structure with shareholders, directors, and officers, and requires more administrative tasks and compliance obligations. Additionally, corporations may be subject to double taxation at the corporate and individual levels, so it’s important to consider the tax implications before choosing this entity.

Partnership:

If you plan to co-host an property with a partner, a partnership structure might be worth considering. A partnership allows multiple individuals to pool resources, share responsibilities, and split profits and losses according to the agreed-upon terms. There are two types of partnerships: general partnerships and limited partnerships. General partners share equal responsibility and liability, while limited partners have limited liability but reduced control over business decisions.

Special Caveat:  All of these entities, other than sole proprietorship, do NOT allow for long-term, fixed rate financing.  Entities such as LLCs and Corporations are not allowed to have their mortgages sold on the secondary-market, which allow for low, long-term rates.

Choosing the most suitable entity for your vacation rental business is a decision that should not be taken lightly. Each entity type has its own advantages and considerations, including liability protection, tax implications, administrative requirements, and personal asset protection. Consult with a qualified attorney or tax advisor who specializes in small business matters to determine the best entity structure for your specific circumstances and goals. By selecting the appropriate entity, you can safeguard your personal assets, optimize your tax strategy, and set your hosting venture on the path to long-term success.  Russell Law Offices, SC has a team of real estate and business attorneys across southern Wisconsin who can help guide you through the entity selection and implementation process.  Reach out today for a consultation in an office near you!