Four Tips to Remember in The Process of Business Succession Planning

Whether it’s a family owned business or a company that you have purchased, you need to be prepared for the process of succession planning shortly after you buy it. It might seem counter-intuitive to think so far into the future when you have only just obtained the company. 

However, there are four critical steps that you need to articulate now. The truth is that no one can really predict exactly when they will exit the business. It may be your concept that you will exit when you are near retirement and may pass it on to a future generation. However, if you don’t have any children or other family members who are interested in stepping in or if a sudden disability raises questions about succession much earlier, you will need to be prepared by having had a conversation with a business succession planning lawyer.

Articulating the crucial agreements and documents in place well in advance gives you options. The four major tips that can enable you with the process of business succession planning include:

  •       Starting early, because too many business owners put these important decisions off until the last minute and this does not account for the unpredictability of life.
  •       Choose a successor. You need to evaluate whether the person you choose to step into your shoes is interested and willing to do so.
  •       Establish value. Make sure you establish the value for your share of the business or the business overall by consulting with a business appraiser or a CPA.
  •       Use a formalized working agreement. A working agreement can make a business transfer much simpler and the succession process should be clarified so that it can be activated immediately in the event of a sudden decision to exit the company.

Transamerica Study Shows Five Biggest Retirement Fears for Americans

A recent study completed by Transamerica identified that even though retirement can be an exciting time, it is also one that provokes anxiety and fear among those reaching age 65 and beyond. 

Many Americans are concerned that retirement will not live up to their expectations or that they won’t have enough assets set aside to protect themselves. Appropriate estate and advance planning is important when it comes to retirement savings. What follows are the five most commonly referenced issues in the Transamerica study:

  •       Outliving investments and savings
  •       Not having access to enough social security benefits
  •       Long term care expenses that are unpredictable
  •       Cognitive decline like Alzheimer’s disease
  •       Lack of affordable and adequate health care

Most people are under the impression that Medicare will assist them in the event that they have an incapacitating event. While this is true to an extent, more serious problems like cognitive decline or long-term care concerns will likely not be covered by Medicare and you should have a plan in place to protect you with those. This is one of the biggest reasons that Americans are concerned with outliving the money they have set aside for retirement.

Financial support can come from many different places but advanced planning is required for all of them. Scheduling a consultation with a knowledgeable estate planning attorney today can help you see how tax planning, charitable giving, estate planning and long-term care planning can all work together to give you a more powerful future.

Tips for Avoiding a Power of Attorney Dispute in The Estate Planning Stage

Drafting a power of attorney is a process often engaged in by someone who wants to protect themselves and potentially their finances or health care decisions if they were to suddenly become incapacitated and unable to make them on their own. However, many power of attorney disputes can occur because someone may argue that you were under undue influence at the time or that you did not have the appropriate mental capacity to make this decision to begin with. 

As a result, an increasing number of people who are putting together power of attorney documents are doing so after being evaluated by their general physician or mental health professional. While this might seem silly to include what is essentially an argument testifying to the proof of your mental capacity at the time, this can help to minimize the chances of power of attorney disputes, if and when it becomes time to activate the power of attorney document.

It can be difficult to share your decision-making process with loved ones who are ultimately not selected as your power of attorney agent, yet this too can help to minimize conflicts when you explain how you arrived at your decision and which person is enabled to make these crucial choices or act on your behalf if you become unable to do so. In the event that you become incapacitated due to an accident or a disability, you will want someone to be able to step in quickly to render these decisions on your behalf.

Avoiding conflict can make things easier for your family members in an already difficult situation. Consult with an experienced New Jersey estate planning lawyer to learn more about protecting your interests.

Is My Will a Shield Against Probate?

There are so many different myths out there surrounding the process of estate planning that it is often too late after someone realizes that a mistake has been made. You may have experienced a loved one who has passed away and left inadequate estate planning instructions. These can be catastrophic and extremely difficult emotionally for family members to handle in the wake of grief.

For this reason, you need to engage in the process of estate planning early and update your estate plan on a regular basis. One common mistake that people make is thinking of their will as their only tool and shield against probate. Many people are under the impression that if they have a will that they do not need to go through the court system or probate. 

Revocable living trusts are a tool that enable you to avoid probate; however, the revocable trust is not effective unless your assets are retitled into the trust name. If you hold the assets in your name alone without a beneficiary designation then the assets are distributed in accordance with the terms of your will.

Before any assets can be collected or distributed with the help of your executor, you have to go through the court system and probate. You may be able to express who is eligible to receive what in your will but this situation could still end up in the courts determining the distribution of assets. It is much better to engage in the process of estate planning now by scheduling a consultation with an attorney who can walk you through the pros and cons of various tools and ensure that the strategies you select are in line with your personal needs and wishes for the future.

Probate 101: What You Need to Know to Conduct Your Estate Planning

Probate is the term for a legal procedure that is used to settle a decedent’s estate, when they have not taken the appropriate estate planning precautions. It is a process through which the court validates the will if one existed, appoints an administrator if there was no will, or grants authority to the executor if there is a will. This process ensures that the property is distributed, that taxes are paid and also enables the legal transfer of the ownership of the property.

All of a person’s property is subject to probate proceedings whether or not a will exists, except for that property that is put inside a trust, property subject to a transfer on death deed, life insurance proceeds, payable on death accounts or property owned in joint tenancy with another person. 

The property outlined in these categories automatically passes to the joint tenant, the trust beneficiary or the designated beneficiary – although it could still be subject to estate and inheritance taxes if you have not taken the appropriate estate planning precautions. Consulting with a knowledgeable estate planning lawyer can give you a better overview of the types of stages that estate planning requires and how you can get the benefits provided by someone who can help you select the strategies and tactics necessary for protecting your interests.

Do You Need a Digital Executor?

The concept of digital estate planning is becoming more popular in recent years because of the surge of online accounts and online assets that people possess. If your service provider does not have an online tool or if you want to guard against the potential misappropriation of such a tool, you might wish to establish a digital executor to manage the carrying out of your digital assets when you pass away. 

The revised Uniform Fiduciary Access to Digital Assets Act of 2015 enables you to extend the traditional fiduciary power for tangible property to include management of a person’s digital assets. This also allows a fiduciary to manage digital property such as web domain, virtual currency, and computer files. However, it won’t restrict a fiduciary’s access to only particular electronic communications. This means that text messages, emails and social media accounts will stay private unless the original user gives express consent in a trust, will, power of attorney or another document.

Your affiliate accounts, Google AdSense accounts, blog and website may require someone familiar with the business to serve as your digital executor, such as an employee. However, a close friend or family member may serve as the appropriate digital fiduciary with your social media and personal accounts. Make sure that you choose someone who has the ability and the knowledge to carry out your necessary requests and inform a digital executor about what is necessary to access your digital estate plan as well as the rules and wishes you have for that plan.

Ready to plan? Now is a great time to schedule a consultation with a dedicated lawyer.

What Are the Primary Purposes of a Will?

As the most basic of estate planning documents, most people will benefit from a will. There are a number of different goals that can be accomplished by establishing this tool and it may become the sole component of your estate plan or it may work in conjunction with other tools and strategies. First of all, your will provides for the direction of distributing your assets to beneficiaries in the family after you pass away. An attorney can be utilized to customize its provisions.

You are also enabled to appoint a personal representative to account for your liabilities, taxes, final expenses, and assets as well as distributing your remaining assets. A will is the only way to designate guardians for your minor children. If something happens to you, a judge may still have to approve this appointment but you will have articulated your wishes. If there are any minor children, you might also establish a trust to manage assets for them in conjunction with the will. A will has to be filed in probate court in order to remain effective. This is the judicial probate as your judicial process for managing the assets to transfer them effectively if you pass away or for managing assets if you are incapacitated.

A court is responsible for overseeing the distribution of assets and payment of liabilities. Typically, an executor will need to employ an attorney. Although your will is an important component of your overall estate plan, it is not the only tool that you may wish to use. Your unique circumstances will dictate what you need to use in order to accomplish your estate planning goals and scheduling a consultation today with a knowledgeable estate planning attorney is the only way to have the peace of mind that someone is working on your behalf and that you have the appropriate tools to help you if you become incapacitated or suddenly pass away.

 

Small Estates Can Avoid Probate as Well

If you have a relatively simple estate and have already listed someone as a beneficiary on all of your investments and life insurance policies, you may wish to consider consulting with an experienced estate planning attorney for the purposes of avoiding probate. If you have already listed someone as a beneficiary in your investment accounts, there’s a good chance that you already realize that you have a goal of avoiding probate. 

A transfer-on-death deed may be used for the home and you may also wish to consider how to appropriately pass on a car title. Your estate planning is a comprehensive process and only one piece of this is a will. Your will controls probate assets and those are the ones in your name that do not have any beneficiary designations. A home and a car are great examples of probate assets. Investment accounts, however, are non-probate assets because they have separate beneficiary designations and will pass outside of the will process as a result. This means that if you have stipulated in your will that someone should receive your investment account but have a separate beneficiary listed, the company managing your investment accounts will have to pass it on to the person named as the beneficiary designation.

Your will, in this example, would only control the car and the home but not the investment account. This means that if you wish to avoid probate, you’ll have to take action for both the home and the car. Using a transfer-on-death deed is one option you may also add as a beneficiary designation on a title. There are many different options available to you for the purposes of estate planning and scheduling a consultation with an experienced estate planning attorney is recommended.

                                                                                                                                                                                           

Estate Planning- A Good Idea Even If the Death Tax Ultimately Disappears

 

Are you currently following all the news about potential tax updates? If so, you’re not alone. Many people are expressing their concerns about whether or not tax issues will affect them if a major reform comes into play. 

Congressional Republicans and the White House have proposed a new tax reform plan that eliminates the Federal Estate Tax. However, while this would make it easier for some people to simplify their estate planning, avoiding complex strategies to produce a potential tax bill, this doesn’t mean that you should necessarily ignore estate planning overall. First of all, you want to ensure that your assets go to where they are needed the most.

The more complicated your family situation, the greater the need for a comprehensive estate plan. Remember that some states will still have state-level estate taxes. The majority of states do not have an estate tax, but six states have inheritance taxes that apply to the recipients of gifts and 14 states in addition to the District of Columbia have state level estate taxes. The exemption amounts are often much lower than the federal exemption of $5.49 million.

The need for federal tax planning in and of itself will also not go away and you should never skimp on estate planning because there are many different goals that you can still accomplish with this process and benefit from the insight of an attorney, who can help you to identify strategies to pass along your accumulated assets to your loved ones. Scheduling a consultation with an experienced estate planning attorney today is strongly recommended.

 

As the Retirement Age Gets Higher, Retirees Get Less Healthy

Currently, there are debates in the mix about raising the social security retirement age. However, researchers argue that this should factor in health trends for those people reaching retirement age as well. Ten years from now, Americans who were born in 1960 will be eligible to start collecting a full social security retirement change.

A federal retirement change enacted in 1983, enables them to get the social security benefits two years later than their parents. However, today’s pre-retirement generation already indicates serious health issues and limits on their lives, when compared with previous generations. The findings were the result of the University of Michigan team, looking at data from long-term health studies and funding acquired from the Alfred P. Sloan Foundation.

The study shows that today’s older employees will face greater challenges than their predecessors as they continue to seek out work and apply for social security disability benefits. Younger cohorts are now facing more serious health issues and in particular, as they will now have to wait till an older age to retire and do so in poor health. This could increase the chance of significant health related costs.

The researchers found that those people born later will have to wait a longer period of time to get full Social Security benefits, also had higher rates of memory and thinking ability problems than earlier cohort groups did at similar ages. Those people who were asked to rate their own health at age 50 said it was poor or fair in larger numbers than other age categories. One in four individuals had to wait until age 66 to claim full social security disability benefits and those who had fewer than 12 years of education reported at least one health associated limitation when they were in their mid-50s. Planning ahead for long term care costs and talking about your retirement benefits in conjunction with your estate planning are both worthwhile goals.