Fewer than one-third of family businesses survive into the second generation, while only 13 percent make it to the third generation. Here are some tips to beat the odds and help your business live on for generations to come.

The sooner you start the planning process the better

The sooner you start planning for succession, the smoother the transition is likely to be. Beginning the process five years in advance is good and 10 years is even better. In fact, many experts recommend having a succession plan built into the original business plan.

Try to include family members in all discussions about succession

Creating your succession plan on your own and then simply announcing it to the rest of the family is a recipe for disaster. By discussing your thoughts with other members of the family, you’ll get an idea of who wants to be part of future operations and who might be interested in pursuing other options.

Don’t let your feelings or preconceived expectations cloud your judgement

Many business owners consider their first-born child to be the natural choice for successor. However, you have to ask yourself if this is honestly the wisest option. Maybe your oldest son or daughter isn’t committed to the business. Maybe one of your other children is not only extremely interested in running the business but also has the right skill set. Or maybe none of your children possess the drive or the necessary skills, in which case it may be best to sell the business to existing employees or an outside party.

Similarly, you can’t lose sight of what is best for the business itself. While giving everyone in the family an equal share of the business might seem like the simplest and fairest approach, it could lead to a host of problems down the road. It may actually be fairer, and smarter, to give the largest share of the business to your successor and find other ways to compensate family members who are not involved in running the business.

Train your successor well

No matter how extensively you plan, you can’t expect your successor—or your business—to flourish without adequate training. You should involve your successor in decision-making and share your knowledge of what it takes to run the business effectively at least two years before stepping aside.

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Emotions can run high after a loved one dies, particularly if your family’s assets include items with sentimental value, and the last thing you want is for your family to start fighting after you pass away.

Defuse Conflict Over Sentimental Items Before You Pass Away

How can you prevent your heirs from fighting over items with sentimental value? Many people believe that a statement in a will or trust that basically says “tangible personal property should be divided as my heirs see fit” will solve the problem. However, this can lead to a host of potential conflicts. A better approach is to put specific items that you believe are of interest to certain family members in writing, and then discuss your decisions in advance with your family. In this way, many emotionally charged disputes can be avoided.

What if you are convinced that a former spouse, one of your children, or the spouse of one of your children will cause trouble no matter what you specify in your will? In this case, you might want to consider a no contest clause. In essence, this clause makes the risk of challenging your will outweigh the potential benefit of doing so. A no contest clause generally stipulates that if a beneficiary contests the will’s provisions or its validity, his or interest in the will is forfeited. It is important to note, however, that you have to leave the heir in question enough of an inheritance to motivate him or her not to challenge the will.

When a Challenge to Your Will is Inevitable

The good news is that, generally speaking, challenging a will isn’t easy. And that’s especially true if there is a valid document in place that was drafted by an experienced attorney, signed by you, and duly executed according to your state’s law. Even in cases without all those dotted “i”s and crossed “t”s, successfully overcoming a will can prove difficult. However, it does happen.

Challenging a will must be done in a formal process called a will contest, or caveat. Caveat proceedings are most common in cases where more than one document exists and the beneficiaries disagree as to which is the “true will.” Contests can also arise when there are holographic (i.e. handwritten) wills, confusing written statements, uncertain verbal statements, surprising or grossly unfair provisions, apparent deathbed revisions, or questions about the circumstances under which a will was made.

As a general rule, if your beneficiaries wish to start a caveat process, they must successfully allege one of the following claims:

Lack of Testamentary Capacity — The testator (i.e. the deceased) was not of sound mind when the will was made, did not know the value of their estate, or otherwise did not understand the consequences and effects of the will.

Invalid Execution — The will was not executed according to the laws of your state. This argument is raised when there are questions about the capacity and/or signatures of either the testator or the witnesses. The court will typically presume that the will was properly executed, so the caveator (the person challenging the will) must overcome that presumption, usually with the help of their attorney.

Negligent Execution — A clerk or attorney made a mistake when drafting or executing the will, thereby accidentally contradicting your intentions.

Undue Influence — The caveator claims you were coerced, wrongfully pressured, or subjected to duress when making the will.

Fraud — The will is fraudulent or a forgery. Caveators may also argue that your intentions were colored by fraud. For example, let’s say you disinherit your nephew because your niece falsely accuses him of stealing your money.

A Second Will — The caveator believes there is another document that supplements or supersedes the purported will.

If you have questions about how you can start protecting assets of sentimental value or how the caveat process works, our office is here to help.

The post Sentimental Assets and Your Will: Understanding When Someone Can Challenge Your Wishes appeared first on Estate Planning Law Center.

Our clients often express concern about protecting the inheritances of their children. Sometimes, parents worry about the security of a child’s job and what will happen if he or she loses that job, cannot pay bills, and subsequently loses the inheritance to creditors. Other times, parents worry about the influence a child’s spouse has over their child’s money management decisions. A child embroiled in a “bad marriage” frequently leads to parental concerns over an inheritance being diminished or lost through divorce. Finally, parents often wonder whether their children are mature enough to handle an inheritance on their own.

Fortunately, there are a number of ways for you to leave an inheritance to your children and protect that inheritance against threats such as these and more. Certain types of trusts, for example, have the power to accomplish this goal, with the added benefit of avoiding probate. Here are a few examples.

Discretionary trusts

With these types of trusts, the trustee has complete discretion to determine trust distributions and the beneficiary cannot demand distributions. The settlor of the trust can provide guidance about distributions and withhold distributions if a child is facing divorce, bankruptcy, and/or personal problems that may impact his or her ability to manage the inheritance wisely. In addition, creditors cannot access trust assets.

Support trusts

In the case of a support trust, the trustee is required to make distributions for health, education, support, or maintenance to the beneficiary if so desired by the beneficiary. Only certain creditors, known as “super creditors,” can access the trust assets. Examples include child support/alimony payments, claims for services that “protected, preserved or enhanced the beneficiary’s interest,” and state/federal government debts such as tax liens.

Spendthrift trusts

These trusts prevent the beneficiary from voluntarily or involuntarily transferring his or interest in the trust and protect trust assets from most creditors, excluding the super creditors described above.

If you are concerned about protecting your children’s inheritances against threats posed by creditors, predators, divorce, or even your children’s own poor decisions, we can design a plan capable of providing the level of protection ideal for your particular situation.

The post Protecting Inheritances For and From Your Heirs appeared first on Estate Planning Law Center.

In this blog, we will shed light on a topic that impacts numerous families – the distinction between dementia and Alzheimer’s. Developing a better understanding of these terms is essential, particularly when navigating legal matters associated with the well-being of loved ones.

Dementia: The Broad Term

Dementia is like an umbrella term that covers a range of cognitive issues affecting memory, reasoning, and daily activities. Think of it as a category that includes various conditions causing cognitive decline. Common symptoms include forgetfulness, difficulty concentrating, and challenges in communication.

Alzheimer’s: A Specific Type of Dementia

Under the dementia umbrella, we can zoom in on Alzheimer’s. It’s a specific type of dementia, representing the most prevalent cause (accounting for 60-70% of all dementia cases as of 2022). Alzheimer’s is characterized by the build-up of abnormal protein deposits in the brain, leading to the death of brain cells over time. This progressive condition significantly impacts memory, behavior, and the ability to carry out daily tasks.

Caring for Individuals with Forms of Dementia

Not only does dementia affect millions of people nationwide, it also affects the individuals who have to take care of them. As of 2020, there were approximately 82 million unpaid caregivers, helping friends and family with dementia. Most people still wish to stay in their home as long as possible, and in-home caregivers allow that to happen.

However, there are now more nursing home facilities designed with specialized dementia or memory care units. They play a crucial role in providing tailored support for individuals facing cognitive challenges. These units are designed to create a safe and comfortable environment that caters specifically to the unique needs of residents with dementia or Alzheimer’s disease. From memory-enhancing programs to secure living spaces, these facilities prioritize creating a supportive atmosphere where residents can maintain their dignity while receiving the specialized attention required for their mental well-being.

Legal Implications

Understanding these distinctions is vital for families dealing with legal matters related to the care of individuals affected by dementia or Alzheimer’s. Legal documents like powers of attorney and healthcare directives become crucial tools in ensuring the well-being of your loved ones as they navigate the challenges associated with these conditions.

If you have questions or concerns regarding legal aspects of dementia or Alzheimer’s care, don’t hesitate to reach out to our experienced team. We’re here to guide you through the legal processes and help you make informed decisions that prioritize the best interests of your family.

Remember, knowledge is power, and being informed about these conditions empowers you to take proactive steps in safeguarding the future.

The post Mind Matters: Distinguishing Dementia from Alzheimer’s appeared first on Estate Planning Law Center.

In an era dominated by technology, scams targeting seniors have become increasingly sophisticated, both over the phone and online. It is crucial to equip our elderly loved ones with the knowledge and tools to safeguard themselves from potential threats. Here are some best practices to help prevent scams and ensure the financial well-being of our seniors.

Stay Informed: Knowledge is power. Seniors should stay informed about common scams circulating in their communities and online. Familiarize them with the latest tactics fraudsters employ to exploit trust and manipulate emotions.

Be Skeptical: Encourage skepticism when dealing with unsolicited phone calls, emails, or messages. Remind seniors that legitimate organizations will not pressure them into immediate action, and they should take the time to verify the legitimacy of any unexpected communication.

Secure Personal Information: Emphasize the importance of safeguarding personal information. Remind seniors to avoid sharing sensitive details like Social Security numbers, bank account information, or credit card details unless they initiated the contact and are certain of the recipient’s authenticity.

Utilize Technology Safely: Guide seniors on safe internet practices. Teach them to recognize and avoid phishing emails, pop-up ads, and fraudulent websites. Ensure their devices have up-to-date security software to protect against malware and viruses.

Family Involvement: Family plays a crucial role in protecting seniors from scams. Regularly communicate with elderly family members about their financial activities. Encourage open discussions about any unusual calls or messages they may have received.

Establish Communication Channels: Create a secure and reliable communication channel, such as a family group chat or email thread, where family members can quickly share information about new scams or potential threats. This fosters a collaborative approach to protecting seniors against fraud.

Reporting Scams: Educate seniors on how to report scams to the appropriate authorities. The federal government has a service where individuals can report various types of scams (https://www.usa.gov/scams-and-fraud). Local law enforcement and state attorney general offices are also valuable resources.

In the journey of safeguarding our seniors, let’s combine awareness, education, and legal preparation. By staying vigilant, informed, and connected, we can fortify the defenses against scams, ensuring a secure and thriving future for our loved ones.

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Everyone has different goals with their estate planning including protecting their vulnerable beneficiaries, leaving instructions for end of life care, providing for children and grandchildren, or even maximizing gifts to charities. But there is one goal that everyone can typically agree on:  Minimizing taxes. Here are some steps to take before the end of the calendar year to reduce your tax bill.

Tax Losses

If some of your investments have done really well this year, and you have significant gains, you might want to offset some of those with tax losses. While you might not think of investment losses as a good thing, they could really help reduce your tax bill. In order to “harvest” your losses, you’ll need to actually sell the investment for a loss. While this is not something that always has to be done at the end of the year, now is a good time to look at what kind of gains you’ve already had for the year, to determine whether taking a loss before year end is a good idea.

Gifting to Children & Charities

While gifting is not always a good strategy, depending on your circumstances, giving away assets to children, grandchildren, or even charities might provide helpful tax benefits. Generally, gifting to other individuals is not a good long-term strategy, and you should consult with your attorney to discuss the consequences of doing so, especially for Medicaid planning purposes. However, high-net-worth individuals should take advantage of the gifting rules.

Each year, individuals can gift up to $17,000 per person, per year (as of tax year 2023); and you can double that to $34,000 for a married couple! This is a huge benefit for individuals who need to reduce their estate during their lifetime, to avoid estate taxes at death. Right now, this strategy is especially important for the ultra-rich, but estate tax rules are scheduled to change in 2025, which will make this strategy more important for more people. This gifting can be done each year, and if you miss one year, you cannot make up for it later!

Gifts to charities also create a tax deduction. Simply choose a charity, and make a cash donation. Or, if you are donating something other than cash, such as property or a vehicle, make sure you do this sooner rather than later, to ensure the gift is completed by December 31^st. If you cannot choose a charity, you can instead donate to a Donor Advised Fund (“DAF”) which counts as a completed gift for tax purposes, but doesn’t actually distribute to a charity until later.

Retirement Plans

Make sure you are contributing as much as you can to your retirement accounts. There are limits on how much you can contribute each year, so be sure to check with your financial advisor to make sure you’re doing all that you can.

Also, if you have to take required minimum distributions (RMDs) make sure you are taking them on time to avoid penalties. This could apply to your own retirement account, if you are old enough, or could apply to you if you’ve inherited an IRA. There have been many changes recently with the passing of the SECURE Act, so again, be sure to check with a financial advisor to ensure you are withdrawing a suitable amount.

So while you are planning for the upcoming holidays, make sure your finances are in order as well. Schedule time with your estate planning attorney, your financial advisor, your accountant, and any other relevant professionals to make sure you can meet your financial and estate planning goals!

The post There’s Still Time: End-of-Year Tax Planning Considerations appeared first on Estate Planning Law Center.

In an exciting move to better serve our valued clients, we are thrilled to announce that our esteemed Estate Planning Law Center is expanding its services to include real estate sales. This strategic decision stems from our commitment to providing comprehensive solutions and meeting the evolving needs of our clients. In this article, we delve into the reasons behind our expansion into real estate sales and how it enhances our ability to serve as a trusted resource in all aspects of our clients’ financial and legal well-being.

Meeting Diverse Client Demands

As an estate planning law firm, we have witnessed firsthand the intricate interplay between estate matters and real estate holdings. Many of our clients seek advice on how to effectively manage and transfer their real estate assets as part of their estate plans. Recognizing this need, we are broadening our expertise to encompass real estate sales, enabling us to offer a more holistic approach to estate planning.

Streamlining the Process

By incorporating real estate sales into our suite of services, we streamline the entire estate planning process for our clients. Instead of navigating multiple professionals and entities, clients can now rely on our firm as a one-stop resource for their legal and real estate needs. This integration simplifies communication, minimizes potential conflicts, and allows for a seamless experience from start to finish.

Expert Guidance and Trusted Advisors

At our firm, our core mission has always been to provide personalized guidance and expert advice tailored to our clients’ unique circumstances. With our expansion into real estate sales, our clients can now benefit from the expertise of our seasoned attorneys who possess an in-depth understanding of both estate planning and real estate transactions. Our legal team will navigate the complexities of real estate sales, ensuring our clients make informed decisions and protecting their interests every step of the way.

Creating Synergy

The intersection of estate planning and real estate sales creates a remarkable synergy that amplifies our ability to deliver optimal outcomes for our clients. By overseeing the entire spectrum of estate planning and real estate transactions, we can craft comprehensive solutions that align with our clients’ financial goals, protect their legacies, and maximize the value of their real estate assets.

A Trusted Partner in Real Estate

With our expansion into real estate sales, our firm solidifies its position as a trusted partner throughout our clients’ real estate journeys. Whether it’s assisting in the sale of a property, guiding clients through the intricacies of investment properties, or advising on the optimal transfer of real estate assets within an estate plan, we are fully equipped to provide the exceptional service and unwavering dedication that our clients have come to expect.

Embracing New Opportunities

As we embark on this exciting venture, we remain committed to upholding the highest standards of professionalism, integrity, and client satisfaction. Our expansion into real estate sales reinforces our unwavering dedication to serving as a comprehensive resource for our clients’ legal and financial needs.

We look forward to embarking on this new chapter, standing alongside our clients as they navigate the dynamic landscape of estate planning and real estate transactions. As always, we are grateful for the trust our clients place in us and remain steadfast in our commitment to providing exceptional service and innovative solutions.

Stay tuned for further updates and feel free to reach out to our firm to explore how our expanded services can benefit you and your unique legal and real estate requirements!

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We find ourselves in an era where the responsibilities of care-giving and financial planning have intertwined, placing a significant burden on a generation aptly named “The Sandwich Generation.” This unique group of individuals is caught between the demands of caring for their aging parents while simultaneously supporting their own children. In this edition, we delve into the crucial topic of estate planning and how it plays a pivotal role in securing the future for both the Sandwich Generation and their loved ones.

Understanding the Sandwich Generation: A Balancing Act

The term “Sandwich Generation” resonates with those individuals who find themselves squeezed between the responsibilities of caring for elderly parents and attending to the needs of their children, often spanning across different generations. This delicate balancing act can be emotionally, physically, and financially draining.

The Dual Responsibilities: Don’t Let Your Sandwich Fall Apart!

Members of the Sandwich Generation face a multitude of challenges as they strive to fulfill their dual caregiving responsibilities. Let’s explore the primary aspects of their role:

1. Caring for Aging Parents: Sandwichers often take on the role of primary caregiver for their aging parents, assisting with daily activities, medical appointments, and managing their overall well-being. This may involve juggling healthcare needs, coordinating medications, providing emotional support, and ensuring a comfortable living environment.
2. Supporting Children: Simultaneously, Sandwichers are actively involved in raising their own children. From nurturing their growth and education to managing their emotional well-being, they strive to provide the love, guidance, and resources necessary for their children’s development.
3. Financial Obligations: Sandwichers face the financial strain of supporting two generations. They may be responsible for their parents’ medical expenses, retirement planning, and caregiving costs, all while managing the financial needs of their own children, such as education, extracurricular activities, and day-to-day living expenses.
4. Emotional Toll: The emotional toll of being “sandwiched” between generations can be immense. Sandwichers often experience feelings of guilt, stress, and exhaustion as they try to meet the diverse needs and expectations of both their aging parents and their children.

Key Considerations for the Sandwich Generation

For those navigating the challenges of the Sandwich Generation, there are several critical factors to consider when approaching estate planning:

1. Seek Support: Don’t hesitate to seek support from friends, support groups, or professional counselors who specialize in caregiving and family dynamics. They can provide valuable insights, guidance, and a safe space to share your experiences.
2. Open Communication: Initiate conversations with both your parents and your children about estate planning to ensure everyone is on the same page and their expectations are understood. This can help reduce future conflicts and ensure that everyone’s needs are addressed.
3. Prioritize Self-Care: Remember that self-care is crucial. Take time for yourself, engage in activities that rejuvenate you, and establish boundaries to prevent burnout.
4. Utilize Available Resources: Familiarize yourself with community resources, such as support services, respite care, and financial assistance programs.
5. Financial Planning: Consult with financial advisors to develop a comprehensive plan that addresses both the present and future financial needs of your parents and children. Explore options such as long-term care insurance, retirement savings, and estate planning to ensure financial stability for all involved.

Seeking Professional Guidance

Estate planning is a complex endeavor, particularly for the Sandwich Generation. It is highly recommended to consult with an experienced Estate Planning Attorney’s office, such as ourselves, when planning! If you know someone who may be “SANDWICHED,” give us a call today!

The post The Sandwich Generation: Have Your Sandwich and Eat It Too! appeared first on Estate Planning Law Center.

While estate planning and tax planning are distinct strategies, they are often intertwined. For example, certain estate planning tools, such as trusts, can also offer tax benefits. Additionally, certain tax planning strategies, such as charitable giving, can be incorporated into an estate plan to benefit both the donor and the recipient. It’s important to work with a financial planner who understands the nuances of both estate planning and tax planning. By taking a comprehensive approach to financial planning, you can ensure that all aspects of your financial life are working together to help you achieve your goals. If you haven’t reviewed your estate plan or tax plan recently, now is a great time to do so. Changes in your personal or financial situation, as well as changes to tax laws, can impact the effectiveness of your plan. By staying up-to-date and making adjustments as needed, you can ensure that your financial plan is working as hard as possible for you and your loved ones.

Advantages of Estate Planning:

• Control: Estate planning allows you to have greater control over the distribution of your assets after you pass away. By creating a plan, you can ensure that your assets are distributed according to your wishes, rather than being subject to the default rules of intestacy.
• Minimize Family Conflict: Estate planning can also help to minimize conflicts between family members over the distribution of your assets. By having a clear plan in place, you can help to avoid misunderstandings and disputes.
• Protect Your Legacy: Estate planning can help to protect your legacy and ensure that your values and beliefs are carried on after you’re gone. This can include creating a charitable foundation or endowment, or making specific bequests to individuals or organizations.

Disadvantages of Estate Planning:

• Cost: Estate planning can be expensive, especially if you create a detailed plan. However, the cost of not having an estate plan can be much higher, both in terms of financial costs and emotional toll on your loved ones.
• Time: Estate planning can be time-consuming, as it requires gathering financial and legal documents, making important decisions, and reviewing and updating your plan regularly. However, the time invested can provide peace of mind and ensure that your wishes are carried out after you’re gone.

Advantages of Tax Planning:

• Save Money: Tax planning can help you save money on your taxes by taking advantage of deductions, credits, and other tax-saving strategies. This can free up more money to put towards your financial goals. •Maximize Retirement Savings: Tax planning can help you maximize your retirement savings by taking advantage of tax[1]advantaged retirement accounts and employer matching contributions.

Disadvantages of Tax Planning:

• Risk: Some tax planning strategies, such as aggressive tax shelters, can be risky and may result in costly penalties or legal fees. It’s important to work with a qualified financial planner who can help you navigate the tax code and ensure that your plan is compliant with the law.
• Limited Scope: Tax planning only addresses one aspect of your financial life: taxes. While saving money on taxes is important, it’s also important to consider other factors, such as estate planning, retirement planning, and investment strategies.

In summary, both estate planning and tax planning have advantages and disadvantages. It’s important to consider your specific financial situation and goals, and work with a qualified financial planner who can help you create a comprehensive financial plan that meets your needs.

The post Estate Planning vs. Tax Planning: Know the Advantages & Disadvantages appeared first on Estate Planning Law Center.

An estate plan is like a warm blanket on a cold night – protecting your loved ones and your assets. Winter sports such as skiing, snowboarding, ice skating, and ice hockey can be a fun and exciting way to spend these cold months. However, it is important to remember that these activities come with an element of risk. Accidents can happen, and it is important to be prepared in case the worst occurs. As the winter months approach, one way to protect yourself and your loved ones is by having an estate plan in place.

An estate plan is a set of legal documents that outline how you want your assets to be managed and distributed after your death. Having an estate plan is essential for ensuring that your wishes are carried out and that your loved ones are taken care of after you are gone. There are several reasons why it is especially important to have an estate plan in place during the winter months. First and foremost, winter is a time when many people are more likely to be affected by illnesses and accidents. The colder weather and shorter days can increase the risk of falls, car accidents, and other types of injuries. If you become incapacitated or pass away unexpectedly, a well-put-together estate plan can help ensure that your assets are managed and distributed according to your wishes.

In addition to protecting your assets, an estate plan can also help you plan for the future care of your loved ones. If you have children or other family members who are reliant on you for financial support, an estate plan can help ensure that they are taken care of if you are unable to do so. You can specify guardianship arrangements for your children, set up trusts to provide for their financial needs, and outline your wishes for their care and upbringing. An estate plan can also help to minimize the burden on your loved ones during a difficult time. When you pass away, your loved ones may be overwhelmed by grief and may not be able to make important decisions about your assets and care. An estate plan can provide clear guidance and help to alleviate some of this burden. Finally, an estate plan can also help to minimize the cost and hassle of probate, which is the legal process of distributing your assets after you pass away. Probate can be time-consuming and expensive, and an estate plan can help to streamline the process and minimize the costs involved.

In conclusion, having an estate plan in place during the winter months is essential for protecting your assets, planning for the future care of your loved ones, and minimizing the burden on your loved ones during a difficult time. If you don’t have an estate plan in place, now is the time to start working on one. If you know someone who needs planning, please contact our office to get started today!

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