Tag Archive for: estate planning

Legacy Succession: Estate Planning for Family Businesses

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Part of running a successful family business is planning for its future. Whether you’re the third generation to take over operations or you started the business from the ground up, with nothing but $100 in the bank, it’s important to make sure the future is bright for your business and won’t be squandered due to lack of funding, managerial issues, or family infighting. 

From a personal standpoint, it’s important to prepare your future business beneficiaries. This may mean allowing your children to work alongside you on weekends and during the summer months. Another important step to consider is knowing when to walk away. This may mean taking an early retirement to enjoy leisure and travel with your spouse or it may mean putting in a few extra years if the business is struggling or your successors aren’t quite ready to do a full takeover. Whatever your situation may be, transitioning out smoothly can save everyone time, money and energy. 

One of the ways you can provide for the future succession of your business is by legally naming the beneficiary in your Will. You will want to be specific, for instance, if you are leaving your family business to two out of your three children, that you name those two children specifically. You may want to include instructions on how revenue is to be split or how managerial duties are to be split. Consulting with a trust attorney and/or business advisor can be incredibly helpful while drafting your Will when it involves business succession. 

Another option to consider in business succession is forming a partnership. By teaming up with the individuals you intend on leaving your business to, you can ease them into the roles they are looking to take on. Finally, you may consider gifting your business interests over to your beneficiaries. By making lifetime gifts (not exceeding the allowable amount per year), you can save a substantial amount on potential tax bills. 

If you or someone you know has a business that needs legacy planning, contact our office today to speak to a licensed attorney. (251) 621-1555

Estate Planning for Young Adults

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Much of our discussions surrounding estate planning focus on the elderly community, but good estate planning is vital throughout one’s adult life. The idea is to get some foundational documents in place early on, and update those documents throughout your life, as circumstances change. 

For young adults, it’s not always the case that they are looking at leaving a massive estate fortune to their loved ones, but rather, they need to put solid plans in place to make sure their minor children are provided and cared for, in the unfortunate event where one or both parents become incapacitated or die. It’s an awfully unpleasant thing to think about happening, but the fact is that it does happen and you want the protection and care of your children to be the last thing on anyone’s mind during that time. 

The easiest way to handle this is to have a valid Will or Trust in place and make sure that there are specific articles that nominate a guardian (or guardians) who will take care of your minors should something happen to you and/or you and your spouse. Without a designated guardian, you are risking putting your children in the foster care system (even if temporarily) or being ultimately placed with relatives who may be well-meaning, but who may not be prepared or equipped to care for them long-term. 

Should a tragedy occur in your family, emotions will be running high and this often causes people to think and act with their emotional brain, rather than with their logical brain. Particularly when small children and their futures are involved, the family tension can run even higher than normal. By setting out your wishes in black and white, you have a greater chance of avoiding interfamily disputes. 

When appointing guardians, it’s critical to consider the financial implications as well. Are you going to be leaving funds with the appointed guardians? Are you going to be placing funds in trust to be managed by a third party trustee? Are you going to be relying on your appointed guardian(s) to financially care for your minors? These are all important things to consider and to discuss with your guardian nominations. 

Finally, having a solid plan in place will undoubtedly ease the emotional burden your children would face. It can cause immeasurable stress on a child if they don’t know who their primary caretaker is or if they’re caught in the crossfire of battling relatives. Having a clear and enforceable estate plan in place helps avoid these unnecessary hurdles. 

 

If you or someone you know is in need of an estate plan, contact our office for a consultation. (251) 621-1555

Storage of Estate Planning Documents: What to Know

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I’ve been practicing for long enough at this point in my life that I can tell a real life story for almost every situation that occurs and boy, do I have stories about mishaps regarding the storage of vital estate planning documents. From Wills being locked in safety deposit boxes to Health Care documents being stored improperly during times of medical emergencies, I’ve seen it all. If you live down in this area of the state, you probably already have an emergency kit ready in the event of a hurricane. This probably includes medication, batteries, a weather radio, water, etc. However, it’s equally as important to take time storing and keeping tabs on your important personal documents such as estate planning documents, medical records, tax information, etc.  

When thinking about where to best store your estate planning documents you should put some thought into both the safety and durability of the storage device and the ease of accessibility to it in the event of an emergency. The most important thing is that YOU are not the sole individual who can access these documents. They should be accessible by appropriate, trusted people in your inner circle otherwise, they are virtually useless. Here are a few storage options to consider:

  1. A fire-proof and flood proof safe located in your home or office. Usually these are relatively inexpensive and more secure than something like a locked filing cabinet. Some best practices would be to keep the safe in a private area of your home or office, make sure it utilizes a combination lock or key and ideally, would be difficult to move. 
  2. A safe-deposit box at a bank. While these fire-proof metal boxes are used by many people for safe storage of important documents, keep in mind that they can be difficult to access in an emergency (for instance, when local banks/business are shut down). Also, access to safe-deposit boxes can be restricted by the bank to only yourself and could be frozen upon your passing. This would require that your family—if a separate individual is not explicitly listed on the box—go through the probate court to even obtain access to your documents.
  3. Online Storage. For the tech savvy, this may be a great options as there are a number of online cloud storage systems available these days. Keeping your documents online keeps them organized, protected from external damage and easily accessible from any digital device with access to the login and password. Keep in mind, however, that some medical/financial institutions may still require original documents, so it’s always best to keep the originals in one safe location, in addition to using a digital storage option. 
  4. At your attorney’s office. Many firms, including Davis, Davis & Associates, offer clients the option to retain original documents, free of charge. Allowing your attorney to safely store your documents is a great way to prevent the misplacement of vital original records, keep documents safe from getting into the hands of any unwanted individuals in your home and keep the records accessible to your trusted attorney, should your family need legal assistance. 

 

For more information on how to best organize and store your estate planning documents, reach out to your trusted financial advisor or legal professional. At Davis, Davis, & Associates, it’s not just our job, but our honor to assist you. 

The Probate Process in Alabama

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In reality, the probate process in any state could fill up an entire book, but this blog post will (hopefully) give you a general overview of what to expect if you are anticipating having to navigate the probate court for the purposes of handling a decedent’s estate. For the purposes of this particular blog post, we will be discussing the process as it relates to filing the Will for a decedent. If an individual dies without a Will, that process is called “Intestate Administration” and will require its own post.

Probate is the court-supervised process of validating someone’s last will and testament, resolving any outstanding debts or taxes and distributing assets according to the terms of the decedent’s will. While it is (in theory) possible to undergo the probate process without any attorney, it is a lengthy, expensive and complicated process that would be best undertaken with the assistance of a qualified probate attorney.

So, let’s get down to brass tacks; the general flow of the probate process when a decedent passes with a will is this—contact the court, get appointed as the personal representative, submit the Will, inventory and submit valuation of all relevant assets, have the court and beneficiaries approval, and finally distribute the assets to rightful heirs/beneficiaries. If you are serving as the Personal Representative (also known as an Executor) you are responsible for:

  • Filing a Petition to Probate the Estate
  • Marshalling together probate assets
  • Managing and locating assets
  • Valuing and appraising estate assets
  • Receiving payments on behalf of the estate and paying taxes on behalf of the estate
  • Setting up a separate bank account for the estate with a separate EIN
  • Interpreting the Will
  • Communicating and working with heirs/beneficiaries
  • Valuing and appraising estate assets
  • Notifying creditors
  • Following all legal deadlines/attending necessary court hearings
  • Paying funeral expenses (if necessary)
  • Filing estate tax returns
  • Submitting death certificates
  • Submitting distribution receipts and officially closing the estate

Don’t be fooled, there are a LOT of minute and nuanced steps that have to be taken in conjunction with everything listed above, but this is a general outline of the tasks involved when it comes to probating the last will and testament of someone. Hence, why I highly, highly, recommend hiring an attorney who specifically does probate work and is well-versed in the law and well-known in the County in which you are operating.

To learn more about the probate process or to speak to a qualified probate attorney, contact Davis, Davis & Associates today to schedule a consultation.