Month: October 2017

Houston Business Lawyer: Succession Planning for Your Small Business is Crucial for its Survival

You have worked hard for the success of your small business, but have you thought about what will happen to it after you are gone? By engaging in Succession Planning, the small business owner can ensure that his or her wishes are followed should the unthinkable occur. Not only does this kind of planning make for an easier transition on those left behind, but it also saves money and can literally keep the business from failing altogether.

Your small business is a part of your estate, and just like your home and other assets, planning needs to be done for how it should be handled upon your death. You will want to go over your options with a qualified Houston wills and estates attorney and make them legal and binding through the proper documentation. Of course, you will also want to communicate with those individuals who will be charged with executing your wishes and keeping the small business running smoothly.

Unfortunately, the death of a small business owner can also spell the death of the business. Estate taxes can be so expensive that the business just cannot survive paying them. Within nine months of your death, as much as 50% of the business’ worth can be due to the IRS. It is pretty hard to imagine a small business surviving the loss of 50% of its value.

Laws like this play a role in the fact that small businesses do not typically survive through the generations. According to The Small Business Review, only about 30% of family businesses make it to the second generation, 12% to the third generation, and 3% to the fourth generation. Obviously, there are a number of factors involved, but the need to pay taxes and take care of other transitional costs create a significant burden in passing a business on to heirs.

By planning in advance, you can take advantage of Section 303 and Section 6166 of the tax codes. These breaks do things like limit taxes on your heirs’ stocks and allow for the estate tax to be paid over the course of 15 years, respectively. Of course, these tax breaks are best utilized when they are understood in advance and the small business owner has made plans for their implementation.

If you have questions about planning for the future of your family business, please feel free to give us a call at Hegwood Law Group: (218) 218-0880.

Navigating Long-Term Care Insurance with Your Houston Elder Lawyer

In our modern era, Americans are living longer, fuller lives. We are fortunate to be getting more and more quality years in the typical lifespan. Of course, there is still a need to plan for accidents, illness, and the eventual possibility that long-term care will be necessary.

Without long-term care insurance, life can become particularly difficult. When costs start mounting up, you will likely have to pay them out of pocket until you are completely broke and have few assets left to pass on to your heirs. Only then will Medicaid kick in. Long-term care insurance can be expensive, but it can end up saving your estate in the long run.

The best way to ensure your needs are met is to be prepared. Your Houston elder lawyer will be able to present you with a variety of options for long-term care insurance and other related considerations. He or she will help you put together a reasonable plan that considers the following:

  • What are you going to need? You may need to do some research to determine what the costs are for long-term care in your area. It is important to have a reasonable idea of what to expect so that you can have enough money to provide for your needs. Remember that costs continually go up, so if you are planning now in middle age, you will need a larger policy to cover the increases due to inflation and other variables.
  • Save money in the long run by planning to pay for the elimination period. By putting aside a reasonable amount of money that will cover expenses between the time that it is determined you need long-term care and when your insurance actually begins to cover it, you can end up with significantly lower premium payments.
  • Work with your Houston elder lawyer to ensure you understand the coverage. Wording and coverage both vary from policy to policy, and you want to ensure that you are getting coverage for exactly what you want. Some policies limit the number of hours a week that you can have care, for instance, which can become problematic if you end up needing to pay for round-the-clock care. You also want to make sure that the policy cannot be canceled or non-renewed when you reach a certain age or become ill.

Your Houston elder care lawyer will have extensive knowledge of what is most beneficial in our area and can help you plan for a future that protects both you and your assets. If you need help getting started, contact our Houston law firm at (281) 218-0880 to schedule a consultation.

 

Choosing Legal Guardians for Kids When Mom and Dad are Divorced | Houston Wills Lawyer

As a Houston wills lawyer, I can not state emphatically enough how important it is for all parents to create a comprehensive plan that will protect their children should the unthinkable occur.

But what happens if you are divorced and can not come to an agreement with your ex-spouse as to who should raise your kids if something happens to you? Should you go ahead and document your own guardianship wishes anyway? And just whose wishes would hold up in court?

In most cases, if your child’s biological parent is still living at the time of your death and you share custody, your children will be raised by the surviving parent, unless there is some clear reason why that should not happen.

There is nothing you can do about this unless you can prove that the child’s biological parent is unfit to raise your child and make a compelling case as to why your guardianship nominations should be honored under the circumstances.

Examples of this might include a severe drug addiction, criminal past or a history of abuse.

However, if this is unlikely, the next best thing to do is name guardians anyway so that your wishes for the care of your children will be known and taken into consideration should your ex-spouse also pass away before your kids reach the age of 18.

This is especially important in the event your ex-spouse did not legally document his or her guardianship wishes upon passing, as your wishes would then be given priority over, say, an unwilling step-parent (just think back to the Cinderella story for a chilling example of this).

Finally, if you are a single parent and have concerns not only about guardianship but also concerning your ex-spouse handling any assets you would leave to your kids if you passed away first, I encourage you to meet with a Houston wills lawyer right away so you can protect such funds in a trust. If you need help getting started with this, please feel free to give us a call at Hegwood Law Group and request a consultation: (218) 218-0880.

 

How to Remove Someone from Your Will in Texas

If you are reading this blog, chances are that you thinking about removing someone from your estate. It is a tough choice. But, if you are ready to move forward, here is what you should know about disinheriting an heir or a loved one.

Disinheriting Your Child

If your will is drafted properly, it is generally possible to disinherit a child. However, you should be aware that if you choose to do this, that child could challenge or contest the will. Again, if you have a solid will in place, your estate will most likely prevail. However, fighting such a lawsuit can be costly for the estate which means there will be less money available for your intended heirs.

Disinheriting Your Spouse

Most of the time, it is impossible to disinherit a spouse. There are certain contracts that allow for a disinheritance such as a prenuptial or postnuptial agreement. These legal documents are valid since the spouse agreed to the arrangement in advance when they signed the document. Without a prenuptial or postnuptial agreement in place, the state’s elective share statute law typically protects the surviving spouse from being either intentionally or unintentionally disinherited.

Here in Texas, the law allows you to completely cut your spouse out of your will, but only in regard to those assets that you control. Because Texas is a community property state, your spouse will still be entitled to a share of the combined marital property and to live in the marital home – even if you try to completely disinherit him or her.

Disinheriting a child or a spouse is very tricky and must be done correctly to ensure that you get the result you are seeking. It is critical to discuss your situation in advance with a qualified estate planning attorney before making any changes to your current estate plan. If you would like to learn more about this, call our office at (281) 218-0880 and make an appointment to discuss the best options for your situation.