Sunday, June 01, 2014
Young and Ill, without Advance Directives
When you are a child, your parents serve as your decision makers. They have ultimate say in where you go to school, what extracurricular activities you partake in and where, and how, you should be treated in the event of a medical emergency. While most parents continue to play a huge role in their children’s lives long after they reach adulthood, they lose legal decision-making authority on that 18th birthday. Most young adults don't contemplate who can act on their behalf once this transfer of power occurs, and consequently they fail to prepare advance directives.
In the event of a medical emergency, if a young adult is conscious and competent to make decisions, the doctors will ask the patient about his or her preferred course of treatment. Even if the individual is unable to speak, he or she may still be able to communicate by using hand signals or even blinking one’s eyes in response to questions.
But what happens in instances where the young adult is incapacitated and unable to make decisions? Who will decide on the best course of treatment? Without advance directives, the answer to this question can be unclear, often causing the family of the incapacitated person emotional stress and financial hardship.
In instances of life threatening injury or an illness that requires immediate care, the doctors will likely do all they can to treat the patient as aggressively as possible, relying on the standards of care to decide on the best course of treatment. However, if there is no "urgent" need to treat they will look to someone else who has authority to make those decisions on behalf of the young individual. Most states have specific statutes that list who has priority to make decisions on behalf of an incapacitated individual, when there are no advance directives in place. Many states favor a spouse, adult children, and parents in a list of priority. Doctors will generally try to get in touch with the patient’s "next of kin" to provide the direction necessary for treatment.
A number of recent high-profile court cases remind us of the dangers of relying on state statues to determine who has the authority to make healthcare decisions on behalf of the ill. What happens if the parents of the incapacitated disagree on the best course of treatment? Or what happens if the patient is estranged from her spouse but technically still married- will he have ultimate say? For most, the thought is unsettling.
To avoid the unknown, it’s highly recommended that all adults, regardless of age, work with an estate planning attorney to prepare advance directives including a health care power of attorney (or health care proxy) as well as a living will which outline their wishes and ensure compliance with all applicable state statutes.
Monday, February 03, 2014
8 Things to Consider When Selecting a Caregiver for Your Senior Parent
8 Things to Consider When Selecting a Caregiver for Your Senior Parent
As a child of a senior citizen, you are faced with many choices in helping to care for your parent. You want the very best care for your mother or father, but you also have to take into consideration your personal needs, family obligations and finances.
When choosing a caregiver for a loved one, there are a number of things to take into consideration.
- Time. Do you require part- or full-time care for your parent? Are you looking for a caregiver to come into your home? Will your parent live with the caregiver or will you put your parent into a senior care facility? According to the National Alliance for Caregiving, 58 percent of care recipients live in their own home and 20 percent live with the caregiver. You should consider your current arrangement but also take time to identify some alternatives in the event that the requirements of care should change in the future.
- Family ties. If you have siblings, they probably want to be involved in the decision of your parent’s care. If you have a sibling who lives far away, sharing in the care responsibilities or decision-making process may prove to be a challenge. It’s important that you open up the lines of communication with your parents and your siblings so everyone is aware and in agreement about the best course of care.
- Specialized care. Some caregivers and care facilities specialize in specific conditions or treatments. For instance, there are special residences for those with Alzheimer’s and others for those suffering from various types of cancer. If your parent suffers from a disease or physical ailment, you may want to take this into consideration during the selection process
- Social interaction. Many seniors fear that caregivers or care facilities will be isolating, limiting their social interaction with friends and loved ones. It’s important to keep this in mind throughout the process and identify the activities that he or she may enjoy such as playing games, exercising or cooking. Make sure to inquire about the caregiver’s ability to allow social interaction. Someone who is able to accommodate your parent’s individual preferences or cultural activities will likely be a better fit for your mother or father.
- Credentials. Obviously, it is important to make sure that the person or team who cares for your parent has the required credentials. Run background checks and look at facility reviews to ensure you are dealing with licensed, accredited individuals. You may choose to run an independent background check or check references for added peace of mind.
- Scope of care. If you are looking for a live-in caregiver, that person is responsible for more than just keeping an eye on your mother or father—he or she may be responsible for preparing meals, distributing medication, transporting your parent, or managing the home. Facilities typically have multidisciplinary personnel to care for residents, but an individual will likely need to complete a variety of tasks and have a broad skill set to do it all.
- Money.Talk to your parent about the financial arrangements that he or she may have in place. If this isn’t an option, you will likely need to discuss the options with your siblings or your parent’s lawyer—or check your mother’s or father’s estate plan—to find out more about available assets and how to make financial choices pertaining to your parent’s care.
- Prepare. Upon meeting the prospective caregiver or visiting a facility, it is important to have questions prepared ahead of time so you can gather all of the information necessary to make an informed choice. Finally, be prepared to listen to your parent’s concerns or observations so you can consider their input in the decision. If he or she is able, they will likely want to make the choice themselves.
Choosing a caregiver for your parent is an important decision that weighs heavily on most adult children but with the right planning and guidance, you can make the best choice for your family. Once you find the right person, make sure to follow up as care continues and to check in with your mother or father to ensure the caregiver is the perfect fit.
Monday, October 14, 2013
Helping the Family Prepare for Loved Ones in Advancing Age
Advance Planning Can Help Relieve the Worries of Alzheimer’s Disease
The “ostrich syndrome” is part of human nature; it’s unpleasant to observe that which frightens us. However, pulling our heads from the sand and making preparations for frightening possibilities can provide significant emotional and psychological relief from fear.
When it comes to Alzheimer’s disease and other forms of dementia, more Americans fear being unable to care for themselves and burdening others with their care than they fear the actual loss of memory. This data comes from an October 2012 study by Home Instead Senior Care, in which 68 percent of 1,200 survey respondents ranked fear of incapacity higher than the fear of lost memories (32 percent).
Advance planning for incapacity is a legal process that can lessen the fear that you may become a burden to your loved ones later in life.
What is advance planning for incapacity?
Under the American legal system, competent adults can make their own legally binding arrangements for future health care and financial decisions. Adults can also take steps to organize their finances to increase their likelihood of eligibility for federal aid programs in the event they become incapacitated due to Alzheimer’s disease or other forms of dementia.
The individual components of advance incapacity planning interconnect with one another, and most experts recommend seeking advice from a qualified estate planning or elder law attorney.
What are the steps of advance planning for incapacity?
Depending on your unique circumstances, planning for incapacity may include additional steps beyond those listed below. This is one of the reasons experts recommend consulting a knowledgeable elder law lawyer with experience in your state.
Write a health care directive, or living will. Your living will describes your preferences regarding end of life care, resuscitation, and hospice care. After you have written and signed the directive, make sure to file copies with your health care providers.
Write a health care power of attorney. A health care power of attorney form designates another person to make health care decisions on your behalf should you become incapacitated and unable to make decisions for yourself. You may be able to designate your health care power of attorney in your health care directive document, or you may need to complete a separate form. File copies of this form with your doctors and hospitals, and give a copy to the person or persons whom you have designated.
Write a financial power of attorney. Like a health care power of attorney, a financial power of attorney assigns another person the right to make financial decisions on your behalf in the event of incapacity. The power of attorney can be temporary or permanent, depending on your wishes. File copies of this form with all your financial institutions and give copies to the people you designate to act on your behalf.
Plan in advance for Medicaid eligibility. Long-term care payment assistance is among the most important Medicaid benefits. To qualify for Medicaid, you must have limited assets. To reduce the likelihood of ineligibility, you can use certain legal procedures, like trusts, to distribute your assets in a way that they will not interfere with your eligibility. The elder law attorney you consult with regarding Medicaid eligibility planning can also advise you on Medicaid copayment planning and Medicaid estate recovery planning.
Monday, September 16, 2013
A Simple Will Is Not Enough
A Minnesota Estate Planning Attorney Explains Why You Need to do More Than Draft a Will
A basic last will and testament cannot accomplish every goal of estate planning; in fact, it often cannot even accomplish the most common goals. This fact often surprises people who are going through the estate planning process for the first time. In addition to a last will and testament, there are other important planning tools which are necessary to ensure your estate planning wishes are honored.
Do you have a pension plan, 401(k), life insurance, a bank account with a pay-on-death directive, or investments in transfer-on-death (TOD) form?
When you established each of these accounts, you designated at least one beneficiary of the account in the event of your death. You cannot use your will to change or override the beneficiary designations of such accounts. Instead, you must change them directly with the bank or company that holds the account.
Special Needs Trusts
Do you have a child or other beneficiary with special needs?
Leaving money directly to a beneficiary who has long-term special medical needs may threaten his or her ability to qualify for government benefits and may also create an unnecessary tax burden. A simple vehicle called a special needs trust is a more effective way to care for an adult child with special needs after your death.
Conditional Giving with Living or Testamentary Trusts
Do you want to place conditions on some of your bequests?
If you want your children or other beneficiaries to receive an inheritance only if they meet or continually meet certain prerequisites, you must utilize a trust, either one established during your lifetime (living trust) or one created through instructions provided in a will (testamentary trust).
Estate Tax Planning
Do you expect your estate to owe estate taxes?
A basic will cannot help you lower the estate tax burden on your assets after death. If you think your estate will be liable to pay taxes, you can take steps during your lifetime to minimize that burden on your beneficiaries. Certain trusts operate to minimize estate taxes, and you may choose to make some gifts during your lifetime for tax-related reasons.
Joint Tenancy with Right of Survivorship
Do you own a house with someone “in joint tenancy”?
“Joint tenancy” is the most common form of house ownership with a spouse. This form of ownership is also known as “joint tenancy with right of survivorship,” “tenancy in the entirety,” or “community property with right of survivorship.” When you die, your ownership share in the house passes directly to your spouse (or the other co-owner). A provision in your will bequeathing your ownership share to a third party will not have any effect.
Monday, September 09, 2013
20 Costly Misconceptions About Wills and Trusts
Misconception #1: A Will avoids probate. No. A Will is the primary tool of the probate system. Your Will is like a letter to the Court telling the Court how you want your property distributed. Then you must make sure that you prove to the Court that all your property is collected and appraised, and all your bills and taxes are paid, before your property can be distributed to your heirs.
Misconception #2: A Testamentary Trust avoids probate. No. A Testamentary Trust is a Trust contained within a Will that holds property for a specific purpose. For example, one purpose would be to hold property until minor children turn 18, when they can legally own property -- or until children reach the age when you believe they are mature enough to responsibly handle the property. A Testamentary Trust is not a Revocable Living Trust. It is part of a Will and takes effect only when the Will is probated.
Misconception #3: Probate costs and the costs of administration of the estate are small. Not necessarily. Such costs can be very substantial. The real problem is, no one can tell you how much the costs will be until the probate has been completed, which often can take several years. The biggest portion of the costs are the fees charged by attorneys and personal representatives for their services for the estate, in addition to filing fees, costs of publication, fees for copies of death certificates, filing and recording fees, bond premiums, appraisal and accounting fees, and more. Often the fees of personal representatives are based on an hourly rate, and while they can tell you what their hourly rate is, they cannot tell you the number of hours their services will take, so they cannot tell you what their total fees will be. Like surgery, probate can be simple and easy, but frequently probate can have drastic and damaging results. Accordingly, like surgery, because of its uncertainty in terms of both the potential for problems and high costs and fees, probate is something best to avoid if you can.
Misconception #4: Property can be distributed according to the terms of your Will in only a few weeks. In Minnesota, the administration usually takes 12 to 15 months. During this time, the deceased person’s property must be inventoried and appraised. Heirs must be notified. Estate and inheritance taxes, if any, must be paid. Contested claims, if any, must be settled. Creditors must be notified and paid. If all of this is not done before the estate is distributed to the beneficiaries of the estate, the personal representative will be personally responsible for those claims. As a result, most personal representatives won’t distribute property until they are sure all claims have been settled.
Misconception #5: Your Will and your assets remain private. No. Because probate is a public legal proceeding, your estate may become a matter of public record. This means that anyone -- including nosy neighbors and salespeople -- can go to Court to find out the balance in your savings account, the value of your stocks, even the appraised value of your diamonds.
Misconception #6: A Will helps you avoid taxes. No. A simple Will does nothing to lower your taxes. A Will simply tells how you want your property distributed, and who you want to act as guardian for your minor children in case you and your spouse die in a common accident. A skilled lawyer can use a Will to plan complicated estates that require tax planning, but the cost of the complex plan will be comparable to the cost of a Revocable Living Trust plan. Plus, the Will-based plan will still have to go through probate.
Misconception #7: Your permanent family home and your vacation home can be handled through the same probate and qualification. Yes, but only if they are in the same state. If you own property in different states, a second probate, called an ancillary administration, will need to be opened, which means your estate may need to hire another attorney. This will increase the overall estate administration expense. And if you own real estate in other states, probates will need to be opened in those states as well.
Misconception #8: A Will prevents quarrels over assets. Wrong. Wills are among the most contested legal documents in the United States. Today, it is common for unhappy relatives to challenge a Will. This results in higher attorneys’ fees and even more delays. Wills actually encourage challenges over assets because a petition must be filed in Court to probate them, which is like filing a lawsuit. As a result, since a lawsuit has already been filed to probate the Will, a contesting party can simply file their claim in Court without instigating their own lawsuit.
Misconception #9: Estranged family members do not need to be notified of a probate if the Will excludes them from an inheritance. In Minnesota, the Court may require that all heirs be notified of the probate even if they are excluded from the Will. Certain aspects of the probate process can be avoided and financial responsibility can be mitigated through the use of various trusts and other types of financial planning.
Misconception #10: A Will from one state is not legal in another state. Wrong. If the Will is legal in the state where it was prepared, it is legal in all 50 states. However, Wills do not travel well from state to state and should be reviewed by an attorney and very likely changed whenever you move to a new state. This is because the Will’s language may not mean the same in other states as it did in the state where it was signed. In addition, many states require witnesses to the Will signing. If proper procedures are not followed, you may need to produce those witnesses in order to probate the Will.
Misconception #11: A Will helps you when you become physically or mentally incapacitated. No. A Will is totally ineffective until death, and, therefore, does nothing to help you through incapacity and disability. Your family or friends may have to go to Court to start costly guardianship or conservatorship proceedings.
Misconception #12: You must name your attorney as your personal representative. No. You may name anyone you choose.
Misconception #13: The cost of your estate plan is only the cost of drawing up the documents. No. The cost of your estate plan is both the cost of drafting the documents and the cost of distributing property to your heirs. Simple Wills are less expensive to set up, but potentially expensive when they go through probate and there is qualification on the estate and estate administration. Revocable Living Trusts may initially cost more than a simple Will, but the overall cost of settling your estate is often substantially less.
Misconception #14: Revocable Living Trusts are only for large estates. No. Revocable Living Trusts are for anyone who wants to avoid costly conservatorship and probate proceedings. In appropriate cases, people with small estates can benefit from a Revocable Living Trust. People with larger estates can benefit even more.
Misconception #15: A Revocable Living Trust is a public document. No. Your Revocable Living Trust can remain private because it does not have to be recorded or published in any way. The only people who will know about your Trust are the people you choose to tell. However, some professionals may need to review your Trust to confirm that your trustee is authorized to take a particular action. This review is for the protection of all beneficiaries of the Trust.
Misconception #16: A Revocable Living Trust cannot be changed. Wrong. You can change and even revoke your Revocable Living Trust any time you wish. The decision is entirely up to you.
Misconception #17: A Revocable Living Trust must have a separate tax return. No. As long as you are a trustee or co-trustee of your Revocable Living Trust, it does not need a tax return of its own. Your personal tax return, which uses your social security number, is sufficient for the IRS.
Misconception #18: When you set up a Revocable Living Trust, you lose control of your assets. No. When you set up your Revocable Living Trust, you simply name yourself and/or your spouse as Trust managers, called “trustees.” In this way, you never give up control.
Misconception #19: The best way to transfer assets to your Revocable Living Trust is through a pour-over Will. No. A pour-over Will can be used to clean up the transfer of any miscellaneous assets to your Revocable Living Trust, but in order for that to take place, the Will must be probated for the assets to be transferred to the Revocable Living Trust. A better course of action is to transfer the assets to your Trust while you are still healthy and able. Not only will you get the peace of mind that comes from knowing the transfer was made properly, you will also get an accurate inventory of your estate.
Misconception #20: There are no costs associated with administering a Trust at the death of the original settlor of the Trust. Not true. While people commonly think that only the probate system costs money and takes time, they fail to understand that administering a Trust, distributing Trust assets to beneficiaries named in the Trust, and terminating the Trust can result in fees and costs. Trustees may also charge fees for their service, and many trustees hire attorneys and accountants. These costs are paid by the Trust before beneficiaries receive their inheritances.
If you have any questions or concerns relating to a will or trust, please contact our office.
Monday, August 05, 2013
Minnesota Gay Marriage and the Fall of DOMA: Should My Partner and I Get Married?
A Minneapolis Estate Planning Attorney Discusses Minnesota's New Law Allowing Gay Couples to Legally Married
Gay Couples Can Legally Marry in Minnesota
On August 1 Minnesota will become the thirtheenth state to legally recognize same-sex marriages. Gay couples who decide to tie knot here will gain a variety of financial benefits and legal rights.
Some of the changes will be significant. Couples who marry and live in Minnesota will be able to file their state tax returns jointly. Couples who decide to marry will also be first in line to inherit their spouses’ assets, even in the absence of a will. They’ll gain an array of smaller benefits as well, down to the ability to jointly apply for a fishing license.
The Supreme Court Declares DOMA Unconstitutional
Further, the Supreme Court held that the section of the Defense of Marriage Act ("DOMA') withholding federal benefits from legally married same-sex couples was unconstitutional. What does that mean?
This means that same-sex couple who are able to legally marry may not be denied the federal benefits provided to married heterosexual couples.
If you are thinking about getting married in Minnesota, or in one of the other jurisdictions in which gay marriage is legal, you need to think about how your new status as a married couple may affect your family with regard to both obligations and benefits. Further, if you are already legally married in another jurisdiction, that marriage will automatically be recognized here in Minnesota. In other words, if you got married in Canada but live here, that marriage became legally valid in Minnesota at 12:01am on August 1, 2013.
I have a client who was legally married in Canada a few years ago and she said to me, "So, basically I just have to wake up on August 1 and we are legally married, right?"
I think that's a great way to phrase it.
But what does it mean
Many clients have called me to ask about how getting married may affect their estate plans - or other issues related to their day-to-day lives. This is, for our community, unchartered territory and so many people are filled with questions. These new laws affect, in part, the following things:
Responsibility for financial support for a spouse
Responsibility for decisions relating to medical care and treatment
Priority for appointment as conservator, guardian, or personal representative for a spouse
Inheritance rights upon the death of a spouse
The ability to designate a spouse automatically as a beneficiary to retirement
The ability to insure a spouse through most insurance policies (except for those governed by federal law – see next question below)
Survivor benefits under workers compensation laws and state or local government pensions
Presumptions of parentage for children born during the marriage
Marriage also provides for an orderly process for dissolution, spousal maintenance, parenting time, and other protections granted through the divorce process
If you have questions on these, or any other issues, related to the new gay marriage laws, feel free to contact Unique Estate Law to discuss them at your convenience.
Monday, June 24, 2013
8 Reasons Young People Should Write a Last Will and Testament
A Minneapolis Estate Planning Attorney Discusses the Reason Young People Should Think About Their Estate Plans
Imagine if writing a last will and testament were a pre-requisite to graduating from high school. The graduate walks across the stage, hands the completed will to the principal, and gets the diploma in return. It might sound strange because most 18 year olds have little in terms of assets but it’s a good idea for all adults to draft a last will and testament.
Graduation from college is another good milestone to use as a reminder to create an estate plan. If you haven’t created a will by the time you marry – or are living with a partner in a committed relationship – then it’s fair to say you are overdue.
Think you don’t need an estate plan because you’re broke? Not true. Here are eight excellent reasons for young people to complete a last will and testament. And they have very little to do with money.
You are entering the military. Anyone entering the military, at 18 or any other age, should make sure his or her affairs are in order. Even for an 18-year-old, that means creating a will and other basic estate planning documents like a health care directive and powers of attorney.
You received an inheritance. You may not think of the inheritance as your asset, especially if it is held in trust for you. But, without an estate plan, the disposition of that money will be a slow and complicated process for your surviving family members.
You own an animal. It is common for people to include plans for their pets in their wills. If the unthinkable were to happen and you died unexpectedly, what would happen to your beloved pet? Better to plan ahead for your animals in the event of your death. You can even direct the sale of specific assets, with the proceeds going to your pet’s new guardian for upkeep expenses.
You want to protect your family from red tape. If you die without a will, your family will have to take your “estate” (whatever money and possessions you have at the time of your death) through a long court process known as probate. If you had life insurance, for example, your family would not be able to access those funds until the probate process was complete. A couple of basic estate planning documents can keep your estate out of the probate court and get your assets into the hands of your chosen beneficiaries much more quickly.
You have social media accounts. Many people spend a great deal of time online, conversing with friends, storing important photos and documents and even managing finances. Without instructions from you, will your family know what to do with your Facebook account, your LinkedIn account, and so forth?
You want to give money or possessions to friends or charities. When someone dies without a will, there are laws that dictate who will receive any assets. These recipients will include immediate family members like parents, siblings, and a spouse. If you want to give assets to friends or to a charity, you must protect your wishes with a will.
You care about what happens to you if you are in a coma or persistent vegetative state. We all see the stories on the news – ugly fights within families over the prostrate bodies of critically ill children or siblings or spouses. When you write your will, write a health care directive (also called a living will) and a financial power of attorney as well. This is especially important if you have a life partner to whom you are not married so they can make decisions on your behalf.
Monday, May 13, 2013
Overview: Buy-Sell Agreements and Your Small Business
Minneapolis Business Lawyer Explains Why Your Small Business Needs a Buy-Sell Agreement
If you co-own a business, you need a buy-sell agreement. Also called a buyout agreement, this document is essentially the business world’s equivalent of a prenup. An effective buy-sell agreement helps prevent conflict between the company’s owners, while also preserving the company’s closely held status. Any business with more than one owner should address this issue upfront, before problems arise.
With a proper buy-sell agreement, all business owners are protected in the event one of the owners wishes to leave the company. The buy-sell agreement establishes clear procedures that must be followed if an owner retires, sells his or her shares, divorces his or her spouse, becomes disabled, or dies. The agreement will establish the price and terms of a buyout, ensuring the company continues in the absence of the departing owner.
A properly drafted buy-sell agreement takes into consideration exactly what the owners wish to happen if one owner departs, whether voluntarily or involuntarily. Do the owners want to permit a new, unknown partner, should the departing owner wish to sell to an uninvolved third party? What happens if an owner’s spouse is involved in the business and that owner gets a divorce or passes away? How are interests valued when a triggering event occurs?
In crafting your buy-sell agreement, consider the following issues:
Triggering Events - What events trigger the provisions of the agreement? These normally include death, disability, bankruptcy, divorce and retirement.
Business Valuation - How will the value of shares being transferred be determined? Owners may determine the value of shares annually, by agreement, appraisal or formula. The agreement may require that the appraisal be performed by a business valuation expert at the time of the triggering event. Some agreements may also include a “shotgun provision” in which one party proposes a price, giving the other party the obligation to accept or counter with a new offer.
Funding - How will the departing owner be paid? Many business owners will obtain insurance coverage, including life, disability, or business continuation insurance on the life or disability of the other owners. With respect to life insurance, the agreement may provide that the company redeem the departing owner’s shares (“redemption”). Alternatively, each of the owners may purchase life insurance on the lives of the other owners to provide the liquidity needed to purchase the departing owner’s shares (“cross purchase agreement”). The agreement may also authorize the company to use it’s cash reserves to buy-out the departing owners.
Wednesday, May 08, 2013
Family Business: Preserving Your Legacy for Generations to Come
A Twin Cities Business Lawyer Discusses How You Can Protect Your Family Business
Your family-owned business is not just one of your most significant assets, it is also your legacy. Both must be protected by implementing a transition plan to arrange for transfer to your children or other loved ones upon your retirement or death.
More than 70 percent of family businesses do not survive the transition to the next generation. Ensuring your family does not fall victim to the same fate requires a unique combination of proper estate and tax planning, business acumen and common-sense communication with those closest to you. Below are some steps you can take today to make sure your family business continues from generation to generation.
Meet with an estate planning attorney to develop a comprehensive plan that includes a will and/or living trust. Your estate plan should account for issues related to both the transfer of your assets, including the family business and estate taxes.
Communicate with all family members about their wishes concerning the business. Enlist their involvement in establishing a business succession plan to transfer ownership and control to the younger generation. Include in-laws or other non-blood relatives in these discussions. They offer a fresh perspective and may have talents and skills that will help the company.
Make sure your succession plan includes: preserving and enhancing “institutional memory”, who will own the company, advisors who can aid the transition team and ensure continuity, who will oversee day-to-day operations, provisions for heirs who are not directly involved in the business, tax saving strategies, education and training of family members who will take over the company and key employees.
Discuss your estate plan and business succession plan with your family members and key employees. Make sure everyone shares the same basic understanding.
Plan for liquidity. Establish measures to ensure the business has enough cash flow to pay taxes or buy out a deceased owner’s share of the company. Estate taxes are based on the full value of your estate. If your estate is asset-rich and cash-poor, your heirs may be forced to liquidate assets in order to cover the taxes, thus removing your “family” from the business.
Implement a family employment plan to establish policies and procedures regarding when and how family members will be hired, who will supervise them, and how compensation will be determined.
Have a buy-sell agreement in place to govern the future sale or transfer of shares of stock held by employees or family members.
Add independent professionals to your board of directors.
You’ve worked very hard over your lifetime to build your family-owned enterprise. However, you should resist the temptation to retain total control of your business well into your golden years. There comes a time to retire and focus your priorities on ensuring a smooth transition that preserves your legacy – and your investment – for generations to come.
Wednesday, February 20, 2013
Estate Planning Lessons, Part 2: Marriage Is Not Enough - You Must Get a Financial Power of Attorney Now
This continues my series on lessons I learned in handling the estates of my parents who both passed away last year. This post will discuss reasons why you should plan things now - do not wait!
I am an estate planning attorney with the knowledge and experience to handle complex issues but found myself running around at the last minute to take care of things for my own father. It turns out that my father had never signed a financial power of attorney. What does that mean? It means that his wife was unable to handle simple financial transactions on his behalf while he was in the hospital and unable to do things like go to the bank. But they're married you say. For many financial matters, even a spouse does not have the right to act on your behalf. For instance, a spouse may not deal with anything listed solely in your name. This generally includes such things as your retirmenet plan, stocks or bank accounts.
So, on a Thursday afternoon I was in my office (instead of the hospital) drafting a power of attorney for him to sign so that his wife could take care of some financial matters he thought were crucial in his last few days of life. Then I ran it to the hospital and got it signed and notarized.
You could look at this and note that we were lucky as he was awake, competent and alert enough to know what he wanted done and still capable of signing the Power of Attorney - even one day later and that would not have been the case. Many people simply put it off unti it's too late and the family has to fight to get a conservatorship to be allowed to make decisions they know the loved one would have wanted.
Please plan now so no one is running around trying to get these things done during such a difficult time.
Friday, December 28, 2012
Unique Estate Law: 2012 Wrap Up for a Nontraditional Law Firm
An Estate Planning Attorney Provides a Personal Review of 2012
The state of the firm
For Unique Estate Law 2012 was a fantastic year. The firm beat projections and I was able to assist more clients than ever before. I had referrals from a wide range of sources and a constant stream of clients coming through my website. I’ve done well enough to start advertising on a local radio station and in a local magazine. I have met many wonderful people and have given them guidance and peace of mind when facing an uncertain future.
Two major losses
But, for Chris Tymchuck, it was the worst year of my life.
Why was it such a bad year personally? In November both my Dad and Mom died within a week of each other. They were 66 and 64 respectively so it hadn’t occurred to the family that they might be gone so soon. While my father had battled cancer for 11 years he was in no worse shape in the end than in prior battles. And my Mom had never been sick a day in her life.
Why am I writing about this?
Why do I share such personal information on a law firm website? Because, it is a cautionary tale of what happens in a blended family when little or no preparation is done.
I was recently sharing my story with two clients and they said, “I can’t believe this is happening to you who spend your time making sure that people like us are ok and covered. You have to share your story with people so they understand that this can, and does, happen.” And they’re right.
I write this blog to assist clients and colleagues with things to consider when drafting estate plans for all types of families – both traditional and non-traditional – and the blog has paid off for me. I feel that, in keeping with the spirit in which I write I must use the lessons of 2012 to further education clients and colleagues through this medium. In short, to give back as the blog has given me so much.
Is it relevant to Unique Estate Law?
Why is my story relevant to this site? Because part of the reason that I specialize in non-traditional families is because I grew up in one – or several – and know the complications that come with being raised with in a complex web of interrelated (and sometimes not) people.
My parents divorced and each remarried and had kids with a subsequent spouse. In addition, my Mom remarried a third time and became a stepparent herself. So, that means I have a stepdad, stepmom, 3 half-brothers, a half-sister, a step brother and a step sister. That, of course, doesn’t include the “traditional” family members such as aunts, uncles and still-living grandparents. There are a lot of people to factor into planning, mourning and administering for someone.
I’ve spent the last couple of months grieving and assisting my family with working through the health care decisions, then memorials, estates and other issues associated with facing the illness and then death of parent. I plan to spend the next few posts discussing some of the lessons I’ve learned by being on the other side – education to practice so to speak – as my hope is to assist others to avoid some of the pitfalls we now face.
I can’t say that anything good has really come out of the losses I suffered this year but I will say that it confirmed my choice of profession. First, because I found relief in returning to work and assisting my clients and second because I feel that I use my law degree in the best possible way – to assist others to prepare for, and perhaps face, the worst times in their lives. For that I am grateful.
From within Hennepin County Unique Estate Law represents estate planning and elder law clients throughout Minnesota, including Minneapolis, Edina, Bloomington, St. Louis Park, Minnetonka, Plymouth, Wayzata, Maple Grove, St. Paul, and Brooklyn Park. The Minnesota law firm of Unique Estate Law focuses on all aspects of estate planning, including specialized wills, trusts, powers of attorney and medical directives for married couples, young families, blended families, single parents, gay families and those going through a divorce. Unique Estate Law also handles probate administration, asset protection, Medical Assistance planning, elder law, business succession planning, adoptions and cabin planning.