James J. Robinson asked:
Are you aware of the Colorado auto insurance minimum coverage requirements? The minimum levels of auto insurance coverage requirements are set by CO lawmakers. Driving without the required insurance is a very serious matter and can result in penalties and unwanted hassle.
Bodily Injury Liability
As a Colorado driver, you must have at least $25,000 in individual bodily injury liability insurance in place. This type of insurance pays for the medical expenses of a person injured in an automobile accident where you are considered the at-fault driver. Your policy must also have a cap of at least $50,000 to pay the medical bills for two or more people injured in the same accident.
Property Damage Liability
The property damage liability portion of your policy pays for damage caused to objects, such as the other driver’s vehicle, a mailbox, a fence, or a shed. The minimum level of coverage required by law in CO is $15,000.
Please keep in mind that the minimum levels of insurance coverage set out here are just that. Drivers in Colorado do have the option of buying more coverage if they want to. Before you make a decision about what level of coverage to buy, you will need to keep in mind that if you at the at-fault driver in an accident, you will be responsible for paying for damages above your policy limits.
It makes more sense to insure your vehicle properly and not take the chance that you will have to consider tapping into your savings or liquidating your assets after an accident. Your insurance company or agent can help you to figure out how much coverage you should have in place.
Find Colorado Auto Insurance Coverage Today
Now that you know what the Colorado auto insurance minimum coverage requirements are, why don’t you get take the next step and make sure you have enough protection for your needs? Spend a few moments comparing rates from some of the top companies and you can be on your way to the best Colorado car insurance in a jiffy!
Michael Potter, J.D. asked:
The use of the Limited Partnership has grown in popularity over the last 25 years as both a way to limit liability and reduce exposure and risk as well as a tax and estate planning tool. Like any other business or investing tool, it can be used properly for its intended purpose or it can be misused, resulting in problems.
PRACTICAL LESSONS LEARNED
Though the Limited Partnership has been adopted in all states of the USA, not all limited partnership statutes are created equal. Some are much better than others, and some are worse. It’s important to be in compliance with state law requirements, remembering of course that some states have far more formality requirements than do others. Here are some useful suggestions.
As a preference, make use of those jurisdictions where the LP statute is not invasive of every partner’s privacy. Some states want each partner’s name and address, even if they are not the (managing) general partner. Other states are far more respectful of privacy and only require the contact information of the General Partner. Be sure to file any Annual Report. In the better jurisdictions, this is normally just a statement of who the general partner is, along with their address. In others, it is more detailed and requires a financial report. Use the Limited Partnership for its intended and proper purpose. It should have a ‘business purpose’, i.e. controlling and holding investment assets such as the stock of corporations, limited liability company ownership interests, investment trading accounts, mutual funds, etc. The Limited Partnership should not be treated as if it’s your personal piggy bank. Ensure that the Partnership Agreement states one or more specific and well-drafted business purposes. Have the Partnership Agreement drafted by a licensed attorney with experience in this area of the law. There are business entity filing providers (incorporators) who don’t know what they’re doing and they tend to provide a ‘generic’ agreement that is a gross disservice to their customers.
AVOIDING IRS PROBLEMS
A series of IRS cases (the Strangi cases) examined the misuse of Limited Partnerships, particularly as to their misuse claiming deep tax discounts where the founder of the Partnership basically treated the assets of the Partnership as his own despite claiming to transfer them to the FLP. To avoid IRS problems, here are some ‘lessons learned’ to consider:
Don’t set up an FLP primarily for tax reasons. That is not a legitimate ‘business purpose’. Doing so only asks for trouble. The IRS considers it abusive to put all of your personal assets into the Partnership. Keep a sufficient amount of funds and accounts outside the Partnership that will provide for your lifestyle. The cost of your estate administration should be paid for out of your Living Trust or personal financial accounts, not out of the Limited Partnership. The same goes for estate taxes. It might be prudent to have a life insurance policy sufficient to cover anticipated estate taxes. That should be held separate from your family’s Partnership. It’s very unwise to put your personal residence into the family’s Limited Partnership. It can easily be deemed to be abusive by the IRS. In the Strangi case the IRS was very critical of Mr. Strangi’s occupying the home without paying rent after the home had been transferred to the Limited Partnership. The same would obviously be true for other ‘personal use’ items such as boats, art collections and vacation homes.
ADMINISTERING THE LIMITED PARTNERSHIP
One of the areas where problems can arise is in the proper administration of the FLP. This includes not only the day-to-day operations, but also the funding of the Partnership. For example:
Change title on assets intended for ownership by the FLP. Failure to do so means that the asset is not actually included in the Partnership even though the Partnership Agreement may list the asset on its initial list of partnership property. Changing title means more than just including an item on a list. Trading accounts at a brokerage for example might require that you close the previous existing account and open a new one, in the name of the Limited Partnership. Real estate that you intend to transfer to the FLPwill need to be re-titled by means of a deed which conveys ownership and is recorded with the County Recorder where the property is located. If there is any confusion over which assets belong to the Limited Partnership itself and which belong to the individuals or entities that are the limited partners, such confusion needs to be clearly resolved with a paper trail that can be traced and audited. Avoid using assets belonging to the Limited Partnership for purposes other than those stated in the business purpose section of the Partnership Agreement. Keep accurate books and records, and have a paper trail that is clear and unmistakable. The books and records of the Limited Partnership should be kept in an orderly and efficient manner that reflects attention to detail and your intention of administering the Partnership in a fair and business-like manner. When distributions are made, they should be equitable and fair. Unless there is an agreement signed by the Partners to make unequal distributions favoring one partner more than the others, distributions should be allocated among the Partners on a pro-rate basis equal to their percentage of Partnership interests (i.e. their percentage of ownership). Funds that are retained inside the Partnership should be re-invested for the good of the Limited Partnership as a whole, not for the personal use as a piggy bank for one partner. Properly drafted Partnership Agreements should certain rights for limited partner - such as the power to replace the General Partner and Amendment rights as to the Partnership Agreement. The General Partner should be expected to make an Annual Limited Partnership Report. This is different from the annual filing required by the Secretary of State. This Annual Limited Partnership Report is from the General Partner to the Limited Partners and serves as a report card as to how the Partnership is doing financially with its holdings and investments. It should highlight any changes (positive or negative) and any upcoming business opportunities, as well to set forth a cash flow statement and balance sheet for every Partner to review. If a family’s Limited Partnership is created close in time to the death of the founder, and if the founder contributed the bulk of the Partnership’s assets at that time, this may lend itself to an attack by the IRS and would likely be successful. It is best to form a family’s Limited Partnership for a proper business purposes (i.e. managing investments, company stock, mutual funds, etc.) and to properly document the timely and proper administration of the Limited Partnership with accurate books and records.
It is important to ‘walk the walk’ and not just ‘talk the talk’. A Limited Partnership that is properly drafted, has a business purpose, is run in a business-like manner, and is established well before the death of the founder has a much better chance of withstanding any audit and proving to be an example of ‘how to do it right’.