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Wills & Estates
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Protect your family against unnecessary taxes and delays.
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Probate of Testate and Intestate Estates
Asset Protection
Power of Attorney
Deeds
Living Wills and Medical Directives
Will Contests
Elder Abuse
Conservatorships
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Last Will and Testament
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Why should I draft a will? When you draft a will, you make it clear as to who you wish to inherit your personal assets and real property upon your death.
For instance, if you pass away and own a home and land, by executing a will, you can direct that said property will go to a particular child, sibling, friend or charitable organization. If you pass away without a will, then the question of who will inherit your property goes by the laws of intestate succession in the state you pass away. States can vary greatly in their laws on this. In some states if you are married and have children, then your spouse and children will share equally in your assets. In some states, if you are married and have children, your spouse will receive all of your assets and your children will receive nothing.
Your will can also make it clear as to who you wish to be the guardian of your children that are minors should you pass away. These are never pleasant things to decide while you are alive, but now is the time to execute a will so it will direct your wishes when you do pass away. You can also direct how your children will be educated to your guardian, as well as provide instructional care for any special needs children.
You can also direct the specifics of your funeral and other final acts through a will.
In addition to making your final decision as to certain assets with a will, you can also avoid probate in certain circumstances in how you name your personal bank accounts and through the drafting of deeds to enable this property to pass outside of the estate and not have to be probated in court.
If you have not yet made a will, then contact an attorney to discuss how a will or estate plan can benefit you and your family.
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Probate of Testate and Intestate Estates
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When a loved one passes away without a will and they have assets or property that does not pass outside of the estate and directly to a designated beneficiary, then their estate will have to be probated as an Intestate Estate and will governed by the laws of intestate succession.
If one passes away with a will, then the matter will be probated as a Testate Estate. They are similar to Intestate Estates as to certain actions required, but the intestate estate will take more time due to certain steps and additional court hearings to determine the heirs at law.
The most commons times one has to probate a matter is when a person passes away, even with a will, with bank accounts with no named pay on death beneficiary or the person has real property titled in their name only. If the bank account had a POD beneficiary or the deed was a Joint tenancy with right of survivorship, then probate may have been avoided.
To probate an estate, your attorney will draft a Petition to Open Estate, and will attend a hearing to open the estate in chancery court. Once the estate is opened, the executor or administrator will file an oath and have Letters issued which allows one to act on behalf of the deceased with respect to their assets and responsibilities. Notice will then be given to known creditors of the deceased so they may file a proof of claim. If a proof of claim is not filed by a creditor within ninety (90) days from the notice to creditors, then the estate will usually not have to pay the creditor for the amount owed to them.
Probate is often necessary to have authority to continue a business of the deceased.
If there is real property such as a home or land involved in the estate, then your attorney can file a petition to sell the real property inside the estate. It is sometimes necessary to sell the property inside the estate before the estate closes due to the delay of the probate and to avoid depreciation of assets, upkeep, and insurance costs.
At the end of the probate process, your attorney will file a Petition to Close Estate. This will in effect close the matter. The petition to the court will give an accounting of all assets and expenses of the estate. Priority expenses such as funeral costs will be paid first. Attorney’s fees and costs will also usually be paid at this time. Creditors who filed a timely proof of claim will also be paid at this time. After the deduction of costs and fees, the assets are then given to the heirs at law according to laws of intestate succession or to the named beneficiary of the will as directed by the deceased.
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Who needs estate planning?
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Countless people make the mistake of believing they don’t need an estate plan. After all, only the extremely wealthy have an “estate”… right?
You might be surprised to learn that you have an estate—at least you do if you have:
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investments,
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a house,
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a car, or
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a savings account.
Don’t have any of those? How about personal possessions? If you have clothes on your back, you have an estate.
We all want to know that our wealth—whether that’s an investment account or a beloved collection of dog-eared books—will go to the right people when we’re gone.
At its most basic, that means having a will that tells your loved ones who should receive which possessions, and when they should receive them. This includes the classic stuff you think of in a will—“my book collection I leave to my brother, the avid reader; my investments, to my husband; my heirloom jewelry, to my daughters” and so on.
But, there’s much more to an estate plan than just “who gets what.” You want to rest assured that your loved ones will be cared for, that your wishes for medical care will be followed to the “T.”
Other components of your estate plan
To that end, your estate planning may include several aspects:
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A financial plan, to ensure your surviving family members are taken care of after you’re gone. This often includes life insurance, which can protect your family from lost income if you become disabled, or pay to support your family after you pass away.
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Tax planning, aimed at preventing your family from paying too much in taxes on your estate (without such planning, the government could take as much as 35% of your estate!).
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A sale or succession plan (if you own a business), ensuring that the company can thrive in your absence.
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Providing for minor children, in the form of guardianship, as well as someone appointed to manage their inheritance until they come of age.
There’s another aspect of estate planning that is often overlooked: planning for medical care. Depending on your situation, that may mean purchasing long-term care insurance, establishing a health care proxy able to make decisions on your behalf, and more. When it comes to your care in old age or disability, most people feel very strongly. By leaving instructions for your family, you can make sure your wishes are carried out.
What happens if you don’t have an estate plan?
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As you can imagine, it’s critically important that most of this planning are put in place long before you need it. Some things simply can’t be planned for—unexpected death or sudden disability can strike without provocation. By planning early—just in case—you can spare those you love both the expense and frustration caused by a poorly planned estate.
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If you die or become disabled without a solid estate plan in place, the state will intervene. For instance, if you die without a will, the state will divide your wealth between your spouse and children—and they may not get the share you would want. Likewise, the state would control a minor’s inheritance.
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The government’s control of your wealth is frustrating enough in life—you don’t want them in charge of your estate when you’re gone!
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Now is the best time to get started.
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None of this is fun to think about—most people find estate planning even less exciting than preparing taxes. But, like responsibly dealing with your taxes, an estate plan is necessary for the sake of your family. And, like your taxes, there’s great help available. The best estate planning firms are able to be sensitive to your wishes and suggest solutions that you may not have though of. An estate planner can remove most of the burden from you, and give you the peace of mind that your intentions will be honored.
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Succession Planning for Your Family Business: Start Preparing Now!
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Every owner of a closely-held family business wants to know the business will continue—even thrive—once they’re gone. A well run, well managed family business can provide for you and your loved ones long after you’ve stepped down from its operation. It can even support your family after you’re gone. Most owners I talk to expect that their business will continue long into the future.
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The reality, though, is less encouraging. According to the Family Business Institute, only 30% of family businesses survive into the second generation—most often due to a failure in the succession planning process on the part of the business owner.
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In many ways, your succession plan is like a will for your business. No one wants to dwell on thoughts of when they’re gone, but doing so is necessary to care for the ones we love—including the business you’ve poured your energy into.
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In the worst cases, I’ve seen ineffective and unrealistic succession plans result in infighting amongst families, and even the liquidation or collapse of businesses.
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In the best cases, I’ve seen families spring into action, with each person knowing their new role, and the business running as strong as ever. (…And the IRS failing to take more than is owed by law.)
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Why succession plans fail (and cause businesses to fail)
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There are a few problems I see small business owners run into time and again.
One of the biggest is objectivity. I talk with owners all the time who “know” that their son (who has only briefly worked as a manager) has what it takes to guide the company in the future, or they “know” that their daughter will take over their leadership role.
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“Have you asked your daughter if she wants to take over for you?” I ask.
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“Well, I don’t have to!” my client says.
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That’s the start of a difficult conversation, to say the least.
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Preparing your child (or sibling, or partner) for a role they don’t want is a recipe for disaster. They conversations may be tough—acknowledging that someone isn’t, in fact, fit for a leadership role can be heartbreakingly painful—but in the end, no one is served by an unrealistic plan.
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Strong communication can soften these blows. Make sure you know all the stakeholders in these decisions. While you might have the last word, your choices will affect your loved ones for many years to come, from your spouse to your children to your employees.
The last thing you want is for your loved ones to be surprised at your decisions—especially once you’re gone. By sharing your thought processes, and seeking open feedback from your family, you can make sure that you don’t blindside someone with a role they don’t want or aren’t ready for… and ensure you aren’t blindsided either.
Keys to an effective succession plan
With that in mind, there are a few aspects that great succession plans have in common.
Plan early
The first is an early start—in fact, the sooner you begin this process, the better.
By planning for your succession long before you may need to, you’ll have much greater flexibility. Depending on your situation, you may be able to transfer ownership of the business to your children and thereby avoid an unnecessary estate tax, or you may decide to slowly transition new leaders, managers, or employees in to the business.
Train your key players
Planning far in advance allows you to ensure that your plan is much more than just a list of names and roles. For that reason, I’ve heard it called succession development rather than planning—the idea being that you want to make sure key people can grow into their upcoming roles, rather than being thrust into them.
Think of it like a football game—you don’t wait until your starting quarterback is injured to have your backup go suit up. No, you want his replacement not just dressed out and sitting on the bench, you want him to be well-trained, warmed up, and excited to get in the game.
Focus on 3 roles
As you think about the business after you’ve stepped down, there are 3 roles that will need to be addressed in every business—ownership, leadership, and management.
For closely-held, family businesses, ownership almost always transfers to one’s children (often split between many children).
Leadership, on the other hand, may go to a partner or trusted employee, depending on the capabilities and wishes of
one’s family. (Remember how important it is to be honest, and to solicit honest feedback?)
Management often must change with the leadership, as the most experienced managers are promoted. Who will replace the new leadership in their previous roles? Often your current managers can identify their best replacements from within.
Involve your accountant & attorney
While much of your succession plan has to come from you—your decisions and your wishes about the future of the company—there are a lot of aspects that require outside help.
When it comes to transfer of ownership, tax planning, and legal issues that might arise, listen to the advice of a trusted accountant and attorney. More often than not, they’ll save you much, much more than they cost you.
With smart planning, though, these kinds of problems can be headed off long in advance.
Don’t put it off
n’t put it off