Tag: Wills

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.

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.

 

Do I really need an attorney to create a Will in Texas?

We get this question a lot: “Do I really need an attorney to create a will in Texas?” Everyone has seen the online companies that allow you to create a will for $99. Some office supply stores sell the forms so you can do it yourself for even less. So with all these cheap alternatives do you really need an attorney?

Perhaps you have guessed my answer. It is “Yes!” of course. But, here is the “why” behind that answer that you might not be expecting…

There is no such thing as a one-size-fits-all will or trust.

Every person’s situation is different. You may be from a traditional family or you could be a part of a blended family – these situations might take different estate planning strategies. The DIY will and trust companies do not adapt to the nuances that make your family unique.

There is no personalized service.

A qualified estate planning attorney will meet with you and go over all the goals that you set for your family. An attorney will help you make very important decisions such as who you will name as executor. An attorney will bring up issues and ask questions that may cause you to choose other people than you originally thought.

No one to turn to when the will or trust is executed.

After you pass away, your executor will take over. The position of executor comes with many responsibilities and there are often questions that arise. Who will he or she turn to when they have questions? They are not likely to get the right answer from the information on a website.

When it comes to creating a will or trust, you really do get what you paid for. Actually, if done incorrectly, that will or trust may not hold up during probate, in which case it is not even worth what you paid – and it could cause pain and suffering for your loved ones. We would love to chat with you about creating an estate plan for your family. We even offer a planning session so that you can make the decision with absolutely no obligation. Call our office at (218) 281-0880 and schedule one today.

Houston Will and Trust Lawyer Offers a Checklist for Trustees

If you have been asked to serve as trustee for someone’s trust, it is your responsibility to successfully carry out that person’s wishes, as well as follow state and federal laws. The role of trustee is an important one, and if you have never served as a trustee before, you may be thinking, “Where do I start?!” As a Houston Will and Trust lawyer, I hope to provide you some guidance in this area.

We get calls from concerned trustees often and understand that the job can be overwhelming. Our first bit of advice to you is: breathe!  You will get through this.  Next, begin working through the steps below.

  • Read the trust- The trust will have all the information you need to carry out the wishes of your loved one. It is important to read it carefully so that you fully understand what is expected of you.
  • Create a checking account for the trust- A checking account should be set up with the money from the estate. You will need funds to make distributions and payments, and you will want to keep track of them in a checking account that is solely used for purposes of the estate.
  • Think of the beneficiary’s interests- You have a fiduciary duty to the beneficiaries of the trust, so it is important to always think of their interest when it comes to the trust.
  • No personal finance dealings with the trust– This one may seem obvious, but it should still be stated that you should not borrow money or lend money to anyone from the trust.
  • Provide anyone listed in the trust with a report of annual account activity- You can simply provide a copy of the checking and investment account statements, or, if you wish, you can present a more formal trust report prepared by an accountant or attorney.
  • Invest trust funds prudently and productively– For this step we strongly suggest that you consult with an investment professional. It is important to invest the funds wisely and have a diverse portfolio, but steer clear of anything too risky.
  • Stay in contact with the beneficiaries– It is important to understand the needs of the beneficiaries since ultimately you are working for them. Keep them informed.
  • Be aware of any beneficiaries receiving public funds– If any of the trust’s beneficiaries receive public assistance, you need to make sure any proceeds of the trust do not jeopardize their benefits. This is especially important when it comes to adults and children with disabilities.
  • File annual tax returns

Being a trustee is a big responsibility and hard work. But the good news is that you do not have to do it alone. Our Houston Will and Trust Lawyers can help you through the process to make sure that you are taking the right steps. Contact us today at (281) 218-0880 to schedule a free consultation.