Estate Planning for Small Businesses

Posted by on Oct 15, 2019 in Legal News |

When people think of estate planning (do people who aren’t lawyers think about estate planning?), they generally only consider it in an individual sense. That’s an important area of estate law, but it is not the only area, by far. Estate planning for small businesses is vital to ensuring the long-term success of your business. You’ve worked hard for what you have, and you want it to last. 

Here are some issues affecting small businesses that make it vital for small businesses to engage with an estate planning attorney:


It’s nicknamed the death tax, but the IRS pretends that nickname doesn’t exist and instead calls it the estate tax. The death tax still exists, and it will affect your small business if the business is part of your estate and meets the financial threshold. The death tax is a tax on the decedent’s (dead person’s) right to transfer their property after death. 

That’s right, even your exit from this earth is taxed. Your small business could be affected by this tax, losing some of its value. However, there are exclusions you can claim or potential deferments of which your heirs can take advantage of. Estate planning will help minimize the tax burden that your small business faces when you pass on.

Trusts, Wills, and Avoiding Probate 

Speaking of transferring property, do you know what will happen to your company if you die? Estate planning for small business includes plans for what will come after the death of the owner. A healthy estate plan will allow your business to avoid probate or being picked apart by creditors. That way, your company’s financial future is far more secure.

Buy-Sell Agreements 

If you aren’t the only owner of your business, you should look into a buy-sell agreement, which will likely be necessary in this situation. Simply put, this type of agreement mandates that the shareholders, upon your death or some other condition, sell their stake at fair market value to others. 

Family-Run Business Issues 

Family-run companies might run into different legal issues than other small businesses, particularly when it comes to succession plans. Family businesses keep things in the family, but there also tends to be an informal structure and culture. There might be pressure to hire other family members, a lack of training, high turnover for non-familiar employees, and other issues that come from keeping a business in the family. 

This isn’t to say that family-run businesses aren’t awesome—they are. But, they do experience their fair share of potential pitfalls specific to such a personalized enterprise. Estate planning, especially for family businesses who have an informal structure, will provide a firm plan and minimize disputes that could otherwise be the downfall of your small business.


Life insurance is great for a small business owner because, if the owner dies, the business might not provide enough money for the owner’s family to live on. Life insurance is a big-picture policy. Term life insurance will help you provide for your family after you pass on. 

Sole Proprietorship Concerns

Succession plans are especially important for a sole proprietorship. If you are a sole proprietor, estate planning will help you tell your heirs either how to run your business when you’re gone or what to do with it when you pass away (sell, transfer, etc.). Estate planning will help you lay out that information for your heirs and make the succession and transfer of the company as smooth as possible. 

Small business estate planning is no small matter. Whether you own a sole proprietorship or an LLC, there are a lot of ways that estate planning can provide for your business’s future. There is no reason a good business with a solid financial foundation should be brought down by an issue estate planning could fix. Contact an estate planning attorney today.

Read More

What is Elder Law?

Posted by on Oct 7, 2019 in Legal News |

As with any demographic, there are issues specific to the elderly that other age groups don’t experience in as pressing a way. Elder law is a subset of the law that focuses on these issues that affect elderly people. The exact definition of elderly is up for debate, but know that you don’t have to be an octogenarian or above to deal with the subject matter of elder law. In this post, we will discuss the various legal issues that concern elderly people in particular. 


Everyone experiences health issues at some point. Hopefully, these aren’t serious or severe, but they are something we all live with in one way or another. Seniors experience healthcare concerns in a more pressing way. As the sunset of someone’s life begins, long-term care and healthcare decision-making become things to think about. 

Long-Term Care 

Long-term care refers to nursing homes or assisted living. Nursing home and assisted living care is not cheap, and picking out a facility you will be comfortable in is no small decision. Legal issues concerning payment for long-term care and disputes about payment and care are subsets of elder law that focus on protecting would-be and current patients. 

Care for the Incapacitated 

There is always a chance that someone may become so sick or incapacitated that they cannot make decisions for themselves. In this situation, the issues of a living will or healthcare directive come into sharp focus. A healthcare directive is a way to delineate ahead of time your wishes for the nurses and doctors taking care of you. That way, if you are too sick to tell them what you want when you’re in their care, they have a document to refer to. 

Estate Planning 

Asset protection and determining where your assets will go after you pass on is a huge subset of elder law. Wills and trusts are legal instruments that allow you to transfer your assets to your loved ones (or to creditors). Through careful estate planning, you can avoid probate court. Your family will not have to go through that lengthy, unpleasant process, and you will know that your possessions are where you want them to be—not with the state.

Government/Private Benefits 

Seniors also receive a variety of government or private benefits, such as SSI, veterans’ benefits, disability, and/or pensions. Every senior’s financial package is different, and you want to make sure that you’re getting what is owed to you without delay. Elder law focuses on the disbursement and dispute-resolution of benefits. Again, this is designed to protect the senior beneficiaries.


Gift taxes and estate taxes tend to affect seniors more as they distribute their assets in wills or trusts. Whether you’re exempt from an estate or gift tax is sometimes unclear, and elder law dealing with tax issues will ensure that you do not run afoul of the IRS. Additionally, tax specialists working in elder law can help minimize the tax burden you or your donee will face. No one likes taxes, and if there is a legal way to reduce them, a tax attorney can figure that out for you.


Capacity is a tricky subject, and it often comes into play for seniors who are dealing with memory loss or similar issues. There may be disputes over a senior’s capacity to execute their will or make financial or healthcare decisions for themselves. Elder law protects seniors from inaccurate determinations of their incapacity. Conversely, elder law can protect incapacitated seniors from making decisions that will harm them later on.

Will Contests 

Will contests are technically an area of elder law, as the will in question is usually that of a senior who has passed on. Will contests are not overly-uncommon. An estate attorney will help the drafter of the will construct a document that will minimize the chance of a posthumous feud.

These are just some of the legal issues that affect seniors more directly than the rest of the population. This doesn’t mean that someone young shouldn’t take part in estate planning; it just means that elderly people should be aware that there is a whole subset of the law dedicated towards helping them.

Read More

What is a Disclaimer Provision? 

Posted by on Sep 23, 2019 in Legal News |

It is difficult, when discussing legal concepts, to have the idea explained in plain English so that non-lawyers can understand. Disclaimer provisions are one such concept that seem difficult but don’t have to be. In this article, we will break down what a disclaimer provision in a will is and how it can help you and your heirs.

Some Definitions 

It always helps to understand what the language even means in the first place. First, a trust is a three-party relationship. The donor (you) grants title to the property to a trustee (the second party). This trustee then, at your command or at a specific time, such as when you die, transfers title to the property to the beneficiary. The beneficiary is the third party that you intended to get the property all along. Secondly, as you know, a will is a document that details where your assets will go after your death.

Now, let’s throw the word “disclaimer” into the mix. A disclaimer trust involves this three-party relationship. In a disclaimer trust, your will contains embedded disclaimer provisions. These provisions let your spouse, after you die, put specific assets into the trust by disclaiming them. The spouse refuses and rejects ownership of certain parts of your estate. Those rejected (disclaimed) parts of your estate go into a trust. 

This trust that contains the disclaimed parts of the estate is called a disclaimer trust. The disclaimed parts of the estate are not taxed when they go into the trust, which is why this instrument is preferred by people who want lower estate taxes for their heirs (i.e. all of us). After the disclaimer trust is established, the trust can pay out support benefits to intended trust beneficiaries. 

An Example

An example may (hopefully) help make this a little less confusing. Here is an example, using fake people, of a disclaimer trust: 

Ann, age 93, dies. She leaves her husband, Harry, age 92, her entire estate. Harry and Ann have three children. Harry disclaims his interest in Ann’s savings account, rejecting ownership of the account because he is 92 and doesn’t need the money. The savings account amount of $1 million goes into a disclaimer trust. It is not taxed.

Ann and Harry’s three children each receive payouts of $1,000 per month from this untaxed disclaimer trust. Harry has disclaimed ownership, so he has no interest in the savings account. The support payments come from the disclaimer trust for as long as Harry elects to disclaim that portion of Ann’s estate.

This simplified example is a way to understand how such a disclaimer trust works. There is another term to know, called a see-through trust.  

See-Through Trust 

A see-through trust should not be confused with a disclaimer trust, though the fact that both involve payouts can be confusing and cause to intermix the two. 

A see-through trust is a fund that is treated in the same way as a beneficiary of a retirement (IRA) account. A see-through trust bases its payouts on life expectancy of the beneficiaries. Based on that amount, it will calculate the required minimum distributions from the trust. These distributions occur after the holder of the IRA dies. The IRA holder can pick their beneficiary. The see-through trust payouts are not permitted to continue indefinitely. 

Inheritance Effects 

Every case is different. The effect of a disclaimer trust on inheritance is murky if the disclaimer is not clear and finalized before the death of the grantor. Note that an inheritance tax and an estate tax are not the same thing. The former is applied to the heir, while the latter applies to the estate of the deceased.

This might seem confusing, but just know that the bottom line involves the potential for lower taxes on your estate. Consult an estate planning attorney to discuss setting up a disclaimer trust and the potential benefits that such a trust will grant you.

Read More

The Impact of Mental Instability on Your Estate 

Posted by on Sep 21, 2019 in Legal News |

One of the side effects of age is that it can cause mental instability. This doesn’t always mean a TV movie scenario where the mentally unstable person is wreaking havoc, but it can involve forgetfulness and an inability to think clearly. Every state’s law is different, and this article is not a definitive statement on the law. If you are mentally unstable but still alive, your wealth does not disappear. Here is an overview of the impact of mental instability on your estate. 

Defining A Lack of Capacity 

Needless to say, garden variety depression or even a touch of old age forgetfulness isn’t going to ring the alarm bells. Mental deficiency, to be actionable, requires you to have a lack of capacity, whether that is due to age or insanity. Insanity is a term that seems harsh and antiquated in today’s more enlightened society, but the term is still used by courts to describe an individual that cannot conduct his affairs because they cannot distinguish fantasy from reality or have a similar psychosis precluding them from functioning. 

Age is a more common way to lose capacity. If you have dementia or Alzheimer’s and are unable to conduct your affairs because of the effect the diseases have on your mind, you might be deemed incapacitated. 

The goal of the law is to protect incapacitated people, not harm them. The law recognizes that mentally incapacitated people, as with physically incapacitated people, are at a heightened risk for exploitation. Here are ways to protect your wealth before incapacitation strikes:

Appoint a POA

A Power of Attorney (POA) is someone that will manage your financial and/or healthcare decisions in your name when you are too incapacitated to make these decisions yourself. A POA steps in and acts in a protective mode, behaving as you would behave if you were able to function at capacity. Consult an estate planning attorney to fill out the paperwork to appoint your POA. They do not have to be a family member. Grant POA status to someone who is responsible, level-headed, and can be trusted to act in your best interests when making financial and healthcare decisions.

Don’t Put Assets in Your Kids’ Names 

Another mistake that is easy to make is to put property in your kids’ names. You may think that this will keep the property safe. After all, it’s your kids, so you can trust them. However persuasive that line of reasoning may be, it is not a good idea. If your kid gets sued, divorced, dies, or has something equally unfortunate happen to them, that asset will be at risk and you may lose it. Much as you may trust your kids, external events can happen that may risk your assets and cause you to lose them permanently.

Consider a Revocable Living Trust 

The better idea is a revocable living trust. This instrument can have one or more of your kids as co-trustees. You can set up the trust so that you still make the decisions as to management and use, while your kids get financial statements and the ability to interject if they feel like you are not making sound decisions (which is a risk when incapacitated). There are protective steps your co-trustee can take if they feel like your mental state is causing you to make bad financial decisions. An attorney can explain more in detail about how a revocable trust can apply to your situation.

Get a Lawyer 

Finally, get a lawyer. All of the above points are valid and necessary to preserving financial health, but they require professional help to accomplish. An attorney is the best person for the job.

The last point on this list is perhaps the most important. Consult an estate planning attorney to ensure you are protecting yourself properly. We don’t know what the future holds, but we do know what we do not want it to hold: financial ruin. Mental incapacity can happen quickly or gradually, but, either way, it certainly does not mean you have to be harmed financially. The law can protect you.

Read More

September is Hurricane Season: Are Your Assets Protected?

Posted by on Sep 18, 2019 in Legal News |

It seems like every week, there is a new hurricane. With Hurricane Dorian barreling towards the Southeast Coast, many Americans are taking stock of their possessions and wondering if they are secure and protected. Luckily, that question is one that you don’t need to wonder about with no answer. In this article, we’ll give you a mini-guide on how to protect your assets against life’s (and Mother Nature’s) unpredictability. 

Don’t Wait 

Before getting into some ideas for asset protection, it’s important to stress that you don’t wait. Hurricane Dorian may not have your location in its path, but that doesn’t mean you should forget about asset protection until a huge storm is coming right at you. If you act quickly, asset protection will be one thing that you can strike off your checklist before the next big storm.

Secure Your Data (For Business Owners) 

The number-one thing that you should protect as a business owner is your employees. Prepare an emergency disaster plan and kit in the event that employees are trapped in the workplace. Human life is not replaceable. 

Number two on the asset protection list for business owners should be data. This includes data on computers, hard drives, paper format, and whatever other form in which you keep your records. Destruction of data can set a business back by weeks, if not months. It may even cause irreparable harm. Make sure that the data stored on physical property is protected. Either move the records to a safe location or copy them into a computer system that will be far from the storm. Store the data where the storm cannot reach, whether electronic, real, or otherwise. 

Insurance, Insurance, Insurance 

Insurance is an expense that you don’t know you need until it’s too late. Sure, the extra money spent on insurance could go for something fun, but it isn’t worth the pain that not having it will cause. Acquire insurance on your assets. Home insurance, flood insurance, fire insurance—the policy payments you make are investments in the security of your future. Also, consider life insurance policies. 

Estate Planning

Estate planning can help you prepare for pretty much anything. If you have a trust or a will, you can determine where your assets will go after you pass away. You can also select guardians for your kids. This might seem like an extreme preparation plan, but you never know. It’s better to have a plan in case of the worst possible outcome than to suffer the consequences of not having one.

Some Odds and Ends 

No disaster preparedness guide would be complete without a mention of physical things you can do to protect your belongings. Disaster preparedness kits are available at pretty much any major store, especially in areas that are prone to storms. Don’t forget, before you evacuate or hunker down, to take some concrete, real-labor precautions when it comes to your home, property, and other assets. This takes some good old fashioned elbow grease to complete, but, if you have your family help, it won’t take forever.


When guarding against water flooding your home, barricade the exterior with sandbags and/or urethane foam. Sandbags have been used to guard against floods for a long time. They absorb the water and provide a barrier. Before a hurricane hits, people rush the buy sandbags. This means that, if you buy them now, when your home is not in danger, you won’t be a victim of a lack of supply. 


Another trick is boarding up windows. Shattered glass is hazardous, both at the time it breaks and after, during cleanup. Boarding up windows will block wind damage. While many windows, especially in Florida and other hurricane-prone areas, are made to withstand high-impact winds, you can never be too sure that the storm won’t pick up an object and fling it at your window. Even the strongest window can break if debris is flung hard enough. 

Secure Loose Objects 

Speaking of debris flying around, one way to minimize that is to secure loose objects that the wind can pick up and hurl at your house. This includes your car, kids’ toys, grill, patio furniture, and anything outside that can be moved. While you can’t control what your neighbors do, secure the loose items in your own area to provide some control.

There are a lot of ways in which you can protect your assets during hurricane season, and this list is by no means exhaustive. Natural disasters are not predictable. We know that they will occur, but we don’t know the exact time or location. Don’t wait to secure your assets. Take these steps immediately, even if Hurricane Dorian hasn’t set its sights on you.

Read More