HANDLING ESTATE PLANNING MISTAKES BEFORE THEY’RE A PROBLEM
As readers of our blog know, estate planning often requires a lot of preparation and a lot of maintenance in order for everything to go relatively smoothly upon death. Even the best of planned estates can hold their challenges. But as we’ve said in past posts, the better prepared your assets are upon your passing, the less likely your heirs will have these difficulties.
But to ensure smooth sailing, it’s important for people here in Texas, and the rest of the country for that matter, to remember that it’s easier to fix mistakes while you’re still able to. And as many lawyers will tell you, these mistakes in estate planning can happen to anyone–even the professionals.
Most people never think about drafting a will or establishing a trust until they reach retirement age, the unfortunate truth about life is that anything that can go wrong, will go wrong. That’s why we always stress the importance of having a plan in place. But it’s important to know what you’re getting yourself into. Although there are a lot of terms and laws to remember, knowing these before you speak to an attorney can actually help you in the long run. Afterall, even professionals can make mistakes and it would be worth your while to be able to catch that mistake now rather than leave it to your bereaved after your passing.
While not having a plan is likely the worst-case scenario, having your loved ones find out a mistake was made during your planning process can often times be just as detrimental. This can lead to arguments, family rifts, and even litigation. Avoiding these unnecessary headaches now by double checking things before you pass can really save time and money for your family and loved ones down the road.
Source: Fox News, “Duck Estate Planning Fiascos Before It’s Too Late,” Sheyna Steiner, May 13, 2013
Continue reading: HANDLING ESTATE PLANNING MISTAKES BEFORE THEY’RE A PROBLEM
Tags: heirs, litigation
HOW LEAVING A FAMILY BUSINESS TO YOUR CHILDREN CAN END BADLY
As we’ve said in past blog posts, if a person does not make the proper arrangements before their passing, the ensuing problems can often times lead to tenuous legal battles and ugly family rifts that never seem to come to a resolution. This is possibly the most true when it comes to family run businesses, which many people here in Texas can attest to.
But according to many business experts, some problems can be averted if a little more attention is paid to estate planning before a company’s owner passes the business on to their children.
It’s advice that could have been used by three Minnesota brothers who finally settled a long-standing legal battle that had been brewing since their father’s death in 2004.
Started in 1960, the men’s father began the family’s legacy by founding a company in the hydraulic brakes industry. The company quickly grew and now has an estimated revenue of around $52 million.
But it seemed that it was always the father’s dream to pass the family-owned business onto his sons, constantly urging them to take jobs at the company. Eventually, the eldest son was promoted to president of the company’s board of directors, soon followed by his younger brother who took up the position as executive vice president. All seemed well, and after the father’s passing, each son owned 50 percent of the company’s voting shares along with the responsibility of continuing what their father had started.
But eventually, the younger brother noticed that he was being left out of meetings, pulled from email lists, and was even being forced to take involuntary administrative leaves. It soon became apparent that his older brother was trying to force him out of the company. Their father’s wills and company plans never included provisions for such a thing and by 2006 the younger brother was forced to sue.
Though the lawsuit was settled in 2011, the division that occurred in the family likely could have been avoided. As some business experts point out, when leaving companies to your children when you pass, it’s often times important to plan meticulously so as to avoid a sticky situation such as the one above to happen to you as well.
Source: Star Tribune, “Lawsuit over control of family-owned MICO ends with $21.8M award,” David Phelps, March 31, 2013
Continue reading: HOW LEAVING A FAMILY BUSINESS TO YOUR CHILDREN CAN END BADLY
Tags: estate planning, family business, litigation