Establishing a Legal Structure

Once you and your child have found housemates or decided to develop a home on your own, a legal structure is the next step.

The type of structure will depend on a number of issues, regulated by the state government. Your group may decide to become a trust, corporation, association, or partnership based on what is best for the residents and the area in which you live.

Always consult with an attorney before making any legal decisions.

Benefits of a Legal Structure

  • Provides a foundation for making decisions
  • Simplifies the process of entering into contracts by allowing several parents to act as a single legal entity
  • Minimizes your risk of liability for debts and obligations
  • Protects the home’s property or assets from the financial liability of one person in a group
  • Allows the home to survive beyond the founding families
  • Provides possible tax advantages

Keep In Mind…

When deciding which legal structure to use, keep the following in mind:

  • The cost and work to set up and maintain the legal structure
  • Possible tax advantages
  • The resulting stability of the residents in the home

Tips for Establishing a Legal Structure

  1. Hire a Neutral Attorney: Although you or another family may already have your own attorney, engage a separate attorney when working as a group. This attorney will not work for any single family, but rather represent everyone.
  2. Designate an Attorney Contact: A designated person should serve as the contact with the attorney. This person must communicate the questions and concerns of the group to the attorney and vice versa.
  3. Get a Head Start: Before meeting with the attorney, you and the other families should reach agreement on these questions:
    • How will the group handle finances?
    • Under what circumstances would a person be asked to leave the group?
    • How will departing members of the group be replaced?
    • How will disputes be resolved?

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