This year,  Estate Planning Awareness Week runs from October 17th to 23rd, and one of our primary goals is to educate you on the vital importance of not only preparing an Will and Trust, but also keeping your plan up-to-date. While you almost surely understand the importance of creating an Will and Trust, you may not know that keeping your plan current is every bit as important as creating a plan to begin with.

In fact, outside of not creating any Will and Trust at all, outdated Wills and Trusts are one of the most common Wills and Trusts planning mistakes we encounter. We’ll get called by the loved ones of someone who has become incapacitated or died with a plan that no longer works because it was not properly updated. Unfortunately, once something happens, it’s too late to adjust your plan, and the loved ones you leave behind will be stuck with the mess you’ve left, or they could end up in a costly and traumatic court process that can drag out for months or even years.

Estate planning is an ongoing process, not a one-and-done type of deal. To ensure your plan works properly, it should continuously evolve along with your life circumstances and other changing conditions. Regardless of who you are, your life will inevitably change: families change, assets change, laws change, and goals change. 

In the absence of any major life events, we recommend reviewing your Will and Trust annually. However, there are several common life events that require you to immediately update your plan—that is, if you want it to actually work and keep your family out of court and out of conflict. To this end, if any of the following events occur in your life, contact us, your Personal Family Lawyer® right away to amend your Will and Trust.

LIFE EVENTS THAT NECESSITATE AN IMMEDIATE REVIEW OF YOUR ESTATE PLAN

01 | YOU GET MARRIED:

Marriage not only changes your relationship status; it changes your legal status. Regardless of whether it’s your first marriage or fourth, you must take the proper steps to ensure your Will and Trust properly reflects your current wishes and needs.

After tying the knot, some of your most pressing concerns include naming your new spouse as a beneficiary on your insurance policies and retirement accounts, granting him or her Medical Power Of Attorney and/or Durable Financial Power Of Attorney (if that’s your wish), and adding him or her to your will and/or trust

02 | YOU GET DIVORCED:

Because divorce is such a stressful process, Wills and Trusts planning often gets overshadowed by the other dramatic changes happening. But failing to update your plan for divorce can have terrible consequences.

Once divorce proceedings start, you’ll need to ensure your future ex is no longer eligible to receive any of your assets or make financial and medical decisions on your behalf—unless that’s your wish. Once the divorce is finalized and your property is divided, you’ll need to adjust your Will and Trust to match your new asset profile and living situation.

03 | YOU GIVE BIRTH OR ADOPT:

Welcoming a new addition to your family can be a joyous occasion, but it also demands entirely new levels of planning and responsibility. At the top of your to-do list should be legally naming both long and short-term guardians for your child. Our Kids Protection Plan offers everything you need to complete this process for free right now. 

Once you’ve named guardians, consider putting other Wills and Trusts planning vehicles, such as a Revocable Living Trust, in place for your kids. These planning tools can make certain the assets you want your child to inherit will be passed on in the most effective and beneficial way possible for everyone involved. Consult with us, your Personal Family Lawyer® to determine which planning strategies are best suited for your family situation.

04 | YOU HAVE A MINOR CHILD REACH THE AGE OF MAJORITY:

Once your kids become legal adults—which is age 18 or 21, depending on your state—many areas of their life that were once under your control will become entirely their responsibility. And if your kids don’t have the proper legal documents in place, you could face a costly and traumatic ordeal should something happen to them.  

For instance, if your child were to get into a serious car accident and require hospitalization, you would no longer have the automatic authority to make decisions about his or her medical treatment or the ability to manage their financial affairs. Without legal documentation, you wouldn’t even be able to access your child’s medical records or bank accounts without a court order.

To prevent your family from going through an expensive and unnecessary court process, speak with your kids about the importance of Wills and Trusts planning, and meet with us to ensure they have the proper legal documents in place as they start their journey into adulthood.

05 | A LOVED ONE DIES:

The death of a family member, partner, or close friend can have serious consequences for both your life and Will and Trust. If the deceased person was included in your plan, you need to update it accordingly to fill any gaps his or her death may create. From naming new beneficiaries, executors, and guardians to identifying new heirs to receive assets allocated to the deceased, make sure your plan addresses all voids created by a death in the family as soon as possible.

06 | YOU GET SERIOUSLY ILL OR INJURED:

As with death, illness and injury are an unavoidable part of life. If you’ve been diagnosed with a serious illness or are involved in a life-changing accident, you may want to review the people you’ve chosen to handle your medical decisions as well as how those decisions should be made. The person you want to serve as your healthcare proxy can change with time, so be sure your plan reflects your current wishes.

07 | YOU MOVE TO A NEW STATE:

 Estate planning laws can vary widely from state to state, so if you move to a different state, you’ll need to review and/or revise your plan to ensure it complies with your new home’s legal requirements. And because some Wills and Trusts planning laws are complex, you’ll want to meet with us to make certain your plan will still work exactly as you desire in your new location.

08 | YOUR ASSETS OR LIABILITIES CHANGE SIGNIFICANTLY: 

Whenever the value of your estate changes dramatically—whether an increase or decrease, or even just the acquisition or sale of assets— you should revisit and update your plan. Whether you inherit a fortune, take out a new loan, retire, sell a home or business, buy a home or business, or change your investment portfolio, your plan should be adjusted accordingly.

09 | YOU BUY OR SELL A BUSINESS:

 If you plan to sell a business, you can implement Wills and Trusts planning strategies to avoid almost all of your taxes—as long as you contact us ahead of time. And, of course, if you are buying a business, you’ll want to ensure your plan is updated to take into account your succession plans for the new venture.

For every business you own, you should consider creating a buy-sell agreement and a business succession plan to protect both your business and your family in case something happens to you. In your plan, you can not only decide who will take over your role as the company’s owner should something happen to you, but you can also provide him or her with a detailed road map for how the business should be run in your absence with a comprehensive business succession plan.

10 | THE FEDERAL ESTATE-TAX EXEMPTION OR YOUR STATE’S ESTATE-TAX EXEMPTION CHANGES SIGNIFICANTLY:

Anytime the federal estate-tax exemption or your state’s estate-tax exemption changes dramatically, we recommend you review your financial assets and your Will and Trust. Tax laws are constantly changing, so you should consult with us to ensure you are achieving the maximum tax savings possible and your investments are still aligned with your strategic goals in light of the latest changes to the tax code.

OUR SYSTEMS KEEP YOUR PLAN UPDATED—FOR LIFE

Keeping your Will and Trust updated is so important that we’ve created proprietary systems designed to ensure your plan is revisited consistently, so you don’t need to worry about overlooking anything, as your family, the law, and your assets change over time. Be sure to ask us about these systems during your visit.

Furthermore, because your plan is designed to protect and provide for your loved ones in the event of your death or incapacity, us, your local Personal Family Lawyer® isn’t just here to serve you—we’re here to serve your entire family. Over the years, we’ll take the time to get to know your family members and include them in the planning process, so everyone affected by your plan is well-aware of what your latest planning strategies are and why you made the choices you did, along with knowing exactly what they need to do if something happens to you. And if you are the parent of minor children, we will put safeguards in place to ensure that your kids are never placed into the care of strangers, even temporarily.

LIFE & LEGACY PLANNING

As a Personal Family Lawyer® firm, our Wills and Trusts planning services go far beyond simply creating documents and then never seeing you again. In fact, we will develop a relationship with you and your family that lasts not only for your lifetime, but for the lifetime of your children and their children, if that’s your wish. 

Unlike traditional Wills and Trusts, a Life & Legacy Plan is designed to grow and change with you. Us, your local Personal Family Lawyer® makes that possible. We aren’t just a one-time document creator; we are your trusted, lifelong counsel and guide, who works with you to ensure your family stays out of court and out of conflict and grows even closer as a result of the legacy you’re creating.

Ultimately, we’ve discovered that Wills and Trusts planning is about far more than planning for your death and passing on your “estate” to your loved ones—it’s about planning for a life you love and a legacy worth leaving by the choices you make today. And this is why we call our services Life & Legacy Planning. Call us, your Personal Family Lawyer® to get your plan started today.

This article is a service of Legal Journeys, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

As you are thinking of starting your own business, you’ll need to get clear on a number of issues to ensure both you and your operation are properly positioned for success. Oftentimes, aspiring entrepreneurs jump headfirst into business ownership, with false expectations of what it takes to run a successful business, and they quickly find that the reality of owning a business is not at all like they thought. 

As with any serious endeavor, you need to approach your new venture with eyes wide open. With this in mind, here are 8 questions you should ask yourself to get a better idea whether or not business ownership is the right path for you. Of course, these are just a few of the factors you’ll need to look into when starting a new company, so before you open your doors, make sure to meet with us, your Family Business Lawyer™ to discuss the specifics of your particular operation.

01 | WHAT ARE YOUR MOTIVATIONS FOR STARTING THE BUSINESS? 

If you are starting a business because you want to make more money and work less hours, consider whether business ownership is the best path. Yes, when you own a business, you do not have any cap on your income, but starting and running a business will require you to work harder than ever before, likely with little to no pay in the beginning, and none of the security or certainty of a 9-5 job. 

And even then, there’s no guarantee your company will succeed. Make sure you are opening your business with the right motivations, and you are being realistic about how hard it’s going to be, how much money it’s going to take, until you get to where you want to be with your time and money. 

If you’d like to have a conversation with us before you open your business to ensure the time and money equation make sense for you, so you are going in eyes wide open, give us a call and we can have a LIFT Business Start-Up Session for your business before you even launch. 

02 | IS THERE A MARKET FOR WHAT YOU ARE SELLING?

Before you launch your business in full, you may want to conduct some market research to ensure that there are buyers for what you are selling. If you were a big company, you’d hire a professional market research firm like Nielsen, Gartner, Forrester, or IDC to conduct your research. But if you don’t have that kind of funding, there are several low-to-no cost methods that can give you insight into whether buyers will buy what you are selling.  

First, clarify where your target market of buyers spends their time and money, and go there (whether virtually or in-person). Begin by talking to as many people as you can, inviting them into conversation with you from a place of curiosity about what you will be selling. 

Is there immediate interest? If not, you may want to reconsider what you are selling, or clarify whether you need to figure out a better way to talk about what you are selling. If you’d love to have a brainstorming session before you bring your product or service to market, give us a call and ask about the LIFT Business Start-Up Session.

03 | ARE YOU CLEAR ON YOUR TARGET CLIENT OR CUSTOMER?

If you aren’t able to take action on determining if there is a market for what you are selling because you don’t know who your target client or customer is or where to find them, pause everything until you figure out who your ideal client or customer is and where to find them. 

04 | HOW MUCH FINANCING WILL YOU NEED?

New business owners tend to have unrealistic expectations about what it actually costs to get a new business off the ground. Rather than guessing how much startup capital you need or expecting to finance your startup or growth out of sales or ignoring the financing altogether, contact us and ask about getting our support to create a “Money Map” with you that clearly outlines your venture’s funding needs, including paying you, if you need to get paid from your business.

When you work with us, we will support you to clearly identify your company’s financial needs not only in the startup phase, but on a regular basis throughout your company’s lifecycle using a process called Money Mapping. Additionally, we can help you determine if your business is properly structured to hit your financial goals, and help you make the appropriate adjustments to your operation whenever necessary to hit those benchmarks.

05 | DOES YOUR PRODUCT OR SERVICE HAVE HIDDEN COSTS OR OBSTACLES?

Of course it does! Part of being successful in business is navigating the hidden costs and obstacles, not whether they exist. Your job is going to be to prepare for those hidden costs or obstacles, so when you hit them, you can see them as opportunities for creativity. 

06 | CAN YOU BUILD A SUCCESSFUL TEAM?

Few people start, run, and grow a successful business alone; most companies have numerous talented people working together to achieve a common mission. To this end, you’ll need to find the right people to build your business alongside you. 

As your Family Business Lawyer®, we can be an invaluable asset when it comes to building your legal, insurance, financial, and tax (LIFT) team of advisors. You definitely don’t want to do this part alone. Instead, get our support as you build your advisory team.

07 | DO YOU HAVE INTELLECTUAL PROPERTY TO PROTECT?

Your intellectual property (IP) is one of your company’s most valuable assets. In fact, a recent study found that up to 80% of the value of today’s typical business is made up of different forms of IP. Given the value your IP represents, you’ll want to take the appropriate steps to protect it and get the most benefit from it.

To ensure you see what you have from an  IP perspective and that you’ve properly protected it, you want to have an experienced business lawyer like us perform an IP audit for your company. An IP audit is a comprehensive, systematic review that identifies all of your IP assets, and evaluates all of the potential risks and opportunities associated with those assets. Contact us, your Family Business Lawyer™ today to make sure your company’s intangible assets are properly protected and leveraged. 

08 | DOES YOUR COMPANY HAVE THE RIGHT LEGAL FOUNDATION?

The business entity structure you choose for your new company is of paramount importance. Indeed, your choice of business entity will affect everything from the amount of taxes you pay to the kind of records you keep and even how vulnerable your personal assets are to lawsuits and debt incurred by your business. Given how important your entity is, it’s crucial to consult with us before making a decision on your choice of entity.

However, your choice of business entity is only one pillar of your company’s legal, insurance, financial, and tax (LIFT) foundation. You’ll also need to make certain your business has the right insurance, financial systems, and tax strategies. Fortunately, as your Family Business Lawyer™, we can support you in all of these areas

TAKE YOUR BUSINESS TO THE NEXT LEVEL

As your Family Business Lawyer®, we have systems in place to get proactive with your business and training to help you keep more money in your business, watch out for risks and pitfalls, handle sticky situations, and effectively tend to the parts of your business that are especially challenging, particularly those involving the legal, insurance, financial, and tax (LIFT) components of your operation.

Before you start your new business—or if you’ve started but may not have all of your legal, insurance, financial, and tax systems and advisory team in place—take our free LIFT 20-Point Assessment. Just taking the 20-Point Assessment is a huge benefit, as it shows you the gaps in your business’ foundation that need the most attention. 

From there, meet with us to conduct a thorough audit of your business, so you can implement our full LIFT Foundation System into your operations. In addition to helping you establish a solid LIFT foundation, we will serve as a trusted advisor to help you sustain and grow your business for years, and even generations, to come. 

To this end, our services go far beyond simply creating legal agreements and other documents for your business and then never seeing you again. In fact, we’ll develop a relationship with you that lasts not only for your lifetime, but for the lifetime of your business and your successor, if that’s your wish. If you are ready to take your business to the next level and reach goals you previously thought were unattainable, schedule a LIFT Start-Up Session or LIFT Business Breakthrough Session with us today.

This article is a service of Legal Journeys, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

What Your Last Will & Testament Will (And Will Not) Do—Part 2

August is “National Make-A-Will Month,” and if you have already prepared your will, congratulations—too few Americans have taken this key first step in the Wills and Trusts planning process. In fact, only 33% of Americans have created their will, according to Caring.com’s 2022 Wills and Estate Planning Study. 

Yet, while having a will is important—and all adults over age 18 should have this document in place—for all but a few people, creating a will is just one small part of an effective Will and Trust that works to keep your loved ones out of court and out of conflict. With this in mind, this series discusses exactly what having a will in place will—and will not—do for you and your loved ones in terms of Wills and Trusts planning.

Last week, in part one, we looked at the different things having a will in place allows you to do. Here, in part two, we detail all of the things that your will does not do, along with identifying the specific Wills and Trusts planning tools and strategies that you should have in place to make up for the potential blind spots that exist in an Will and Trust that consists of only a will.  

If you have yet to create your will, or you haven’t reviewed your existing will recently, contact us, your Personal Family Lawyer® to get this vital first step in your Wills and Trusts planning handled right away.

What A Will Won’t Do

While a will is a necessary part of most Wills and Trusts, your will is typically a very small part of a comprehensive Will and Trust. To demonstrate, here are the things you should not expect your will to accomplish:

1. Keep your family out of court: Following your death, in order for assets in your will to be transferred to your beneficiaries, the will must pass through the court process known as probate. During probate, the court oversees the will’s administration, ensuring your assets are distributed according to your wishes, with automatic supervision to handle any disputes. 

Like most court proceedings, probate can be time-consuming, costly, and open to the public. Moreover, during probate, there’s also the chance that one of your family members might contest your will, especially if you have disinherited someone or plan to leave significantly more money to one relative than the others. Even if those contests don’t succeed, such court fights will only increase the time, expense, and strife your family has to endure. 

Bottom line: If your Will and Trust consists of a will alone, you are guaranteeing your family will have to go to court if you become incapacitated or when you die. Fortunately, it’s easy to ensure your loved ones can avoid probate using different types of trusts, so meet with us, your Personal Family Lawyer® to spare your family this unnecessary ordeal.

2. Pass on certain types of assets: Since a will only covers assets solely owned in your name, there are several types of assets that your will has no effect on, including the following:

• Assets with a right of survivorship: Property held in joint tenancy, tenancy by the entirety, and community property with the right of survivorship, bypass your will. These types of assets automatically pass to the surviving co-owner(s) when you die.
• Assets with a designated beneficiary: When you die, assets with a designated beneficiary pass directly to the individual, organization, or institution you designated as beneficiary, without the need for any additional planning. Common assets with beneficiary designations include retirement accounts, IRAs, 401(k)s, and pensions; life insurance or annuity proceeds; payable-on-death bank accounts; and transfer-on-death property, such as bonds, stocks, vehicles, and real estate. 
• Assets held in a trust: Assets held by a trust automatically pass to the named beneficiary upon your death or incapacity, so these assets cannot be passed in your will. This includes assets held by both revocable living trusts and irrevocable trusts.

3. Pass ownership of a pet and money for its care: Because animals are considered personal property under the law, you cannot name a pet as a beneficiary in your will. If you do, whatever money you leave it would go to your residuary beneficiary, who would have no obligation to care for your pet.

It’s also not a good idea to use your will to leave your pet and money for its care to a future caregiver. That’s because the person you name as beneficiary would have no legal obligation to use the funds to care for your pet. In fact, this person could legally keep all of the money and drop off your pet at a shelter.

The best way to ensure your pet gets the care it deserves following your death is by creating a pet trust. As your Personal Family Lawyer®, we will help you set up, fund, and maintain such a trust, so your furry family member will be properly cared for when you’re gone.

4. Leave funds for the care of a person with special needs: There are a number of unique considerations that must be taken into account when planning for the care of an individual with special needs. In fact, you can easily disqualify someone with special needs for much-needed government benefits if you don’t use the proper planning strategies. For this reason, a will should never be used to pass on money for the care of a person with special needs.

If you want to provide for the care of your child or another loved one with special needs, you must create a special needs trust. However, such trusts are complicated, and the laws governing them can vary greatly between states.

Given such complexities, you should always work with an experienced Wills and Trusts planning lawyer like us to create a special needs trust. As your Personal Family Lawyer®, we can make certain that upon your death, the individual would have the financial means they need to live a full life, without jeopardizing their access to government benefits.

5. Reduce estate taxes: If your family has significant wealth, you may wish to use Wills and Trusts planning to reduce your estate tax liability. However a will is useless for this purpose. To reduce or postpone your estate taxes, you will need to set up special types of trusts. If you are looking to reduce your estate tax liability, consult with us, your Personal Family Lawyer® to discuss your options.

6. Protect you from incapacity: Because a will only goes into effect when you die, it offers no protection if you become incapacitated and are no longer able to make decisions about your financial, legal, and healthcare needs. If you do become incapacitated, your family will have to petition the court to appoint a guardian to handle your affairs, which can be costly, time-consuming, and traumatic for your loved ones.

And there’s always the possibility that the court could appoint a relative as a guardian that you’d never want making such critical decisions on your behalf. Or the court might select a professional guardian, putting a total stranger in control of your life, which leaves you open to potential fraud and abuse by crooked guardians.

However, using a trust, you can include provisions that appoint someone of your choosing—not the court’s—to handle your assets if you are unable to do so. When combined with a well-prepared medical power of attorney and living will, a trust can keep your family out of court and out of conflict in the event of your incapacity, while ensuring your wishes regarding your medical treatment and end-of-life care are carried out exactly as you intended.

Get Professional Support With Your Estate Planning
Although creating a will may seem fairly simple, you should always consult with an experienced Wills and Trusts planning lawyer like us to ensure the document is properly created, executed, and maintained. And as we’ve seen here, there are many scenarios in which a will won’t be the right Wills and Trusts planning solution, nor would a will keep your family and assets out of court.

Meet with us your Personal Family Lawyer® for a Family Wealth Planning Session, which is the first step in our Life & Legacy Planning process. During this process, we’ll walk you through an analysis of your assets, what’s most important to you, and what will happen to your loved ones when you die or if you become incapacitated. From there, we’ll work together to put in place the right combination of Wills and Trusts planning solutions to fit with your asset profile, family dynamics, budget, as well as your overall goals and desires. 

As a Personal Family Lawyer® firm, we see Wills and Trusts planning as far more than simply planning for your death and passing on your “estate” and assets to your loved ones—it’s about planning for a life you love and a legacy worth leaving by the choices you make today—and this is why we call our services Life & Legacy Planning. Contact us today to schedule your visit to ensure that your loved ones will be protected and provided for no matter what happens to you.

This article is a service of Legal Journeys, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

August is “National Make-A-Will Month,” and if you have already prepared your will, congratulations—too few Americans have taken this key first step in the Wills and Trusts planning process. In fact, only 33% of Americans have created their will, according to Caring.com’s 2022 Wills and Estate Planning Study. 

Yet, while having a will is important—and all adults over age 18 should have this document in place—for all but a few people, creating a will is just one small part of an effective Will and Trust that works to keep your loved ones out of court and out of conflict. With this in mind, here we look at exactly what having a will in place will—and will not—do for you and your loved ones in terms of Wills and Trusts planning.

If you have yet to create your will, or you haven’t reviewed your existing will recently, contact us, your Personal Family Lawyer® to get this vital first step in your Wills and Trusts planning handled right away.

What A Will Does

A will is a legal document that outlines your final wishes in regards to how your assets are distributed to your surviving family members. Here are some of the things having a will in place allows you to do:

1. Choose how assets are divided upon your death: A will’s primary purpose is to allow you to designate how you want your assets divided among your surviving loved ones upon your death. If you die without a will, state law governs how your assets are distributed, which may or may not be in line with your wishes.

However, as we’ll discuss more below, a will only allows you to provide for the distribution of certain types of assets—namely, a will only covers assets owned solely in your name. Other types of assets, such as those with a beneficiary designation and assets co-owned by you with others, are not affected by your will.

2. Name an executor: In your will, you can name the person, or persons, you want to serve as your executor, sometimes called a “personal representative.” Following your death, your executor is responsible for wrapping up your final affairs. This includes numerous responsibilities, including filing your will with the local probate court, locating and managing all of your assets, paying off any debts you have outstanding, filing and paying your final income taxes, and finally, distributing your remaining assets to your named beneficiaries.
3. Name guardians for your minor children: If you are the parent of minor children, it is possible to name legal guardians for them in your will. However, naming guardians for your children in your will alone is seriously risky, and doing so may even leave your kids vulnerable to being taken into the care of strangers if something happens to you. And this is true even if you’ve worked with another lawyer to create your will, because most lawyers haven’t studied and been trained on  what’s necessary for ensuring the well-being and care of minor children.

Fortunately, whether you’ve named guardians for your kids in your will or have yet to take any action at all, you’ve come to the right place. As your Personal Family Lawyer® firm, we have been trained by the author of the best-selling book, Wear Clean Underwear!: A Fast, Fun, Friendly, and Essential Guide to Legal Planning for Busy Parents, on legal planning for the unique needs of families with minor children. 

As a result of this training, we offer a comprehensive system known as the Kids Protection Plan®, which is included with every Will and Trust we prepare for families with young children. While you should meet with us to put the full Kids Protection Plan® in place as soon as possible, protecting your children is such a critical and urgent issue, we’ve created a totally free website, where you can get your plan started right now.

After you’ve completed those initial actions, schedule a Family Wealth Planning Session with us, so we can put the full Kids Protection Plan® in place, and determine if there is anything else your family might need to ensure the well-being and care of your children.

⇒ If you have already named long-term guardians in your will—either on your own or with a lawyer—we can review your existing legal documents to see whether you have made any of the six common mistakes that could leave your kids at risk. From there, we will revise your plan to ensure your children are fully protected.

4. Serve as a backup for a living trust: Because it can be difficult to transfer the legal title to every single one of your assets into a revocable living trust before your death, most trusts are combined with what’s known as a “pour-over” will. This type of will serves as a backup to a living trust, so all assets not held by the trust upon your death are transferred, or “poured,” into your trust through the probate process.

A Small—But Important—First Step
As you can see here, having a will in place only gives you a limited amount of power over the distribution of certain assets, but that doesn’t mean you should go without one. Without a will, you would have no say in who inherits your assets when you die, and everything you own could even go to the state.

But worse than that, your surviving loved ones will be the ones who have to clean up the mess you’ve left behind. And they will have to handle all of this while grieving your death. Instead, you should see your will as an important first step in the Wills and Trusts planning process—one that works best when integrated with a variety of other legal vehicles, such as trusts, powers of attorney, and advance healthcare directives.

Next week, in part two, we’ll detail all of the things that your will does not do, and then we’ll outline the different Wills and Trusts planning tools that you should have in place to make up for these potential blind spots in your Will and Trust. Until then, if you need to get your Wills and Trusts planning started or you would like us to review your existing Will and Trust (even one created by another lawyer) to see if you are missing anything, contact us, your Personal Family Lawyer®.  

This article is a service of Legal Journeys, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

If you dream of one day leaving your company to your family, but you haven’t properly included your business in your Will and Trust, that dream could become a nightmare for your heirs—and for your partners, team members, and clients too. In fact, properly planning for what would happen to your business upon your death or incapacity is one of the most important things you can do for your company.

Without a proper Will and Trust, the business you worked so hard to build could be in serious jeopardy when something happens to you. Not only that, but since your business is likely your most valuable asset, proactive planning is crucial not only for your company’s continued survival, but for your family’s future well-being as well.

Fortunately, you can use a few basic Wills and Trusts planning strategies to make sure your business survives your incapacity or death. Although you should consult with us, as your Family Business Lawyer™, to determine the specific planning vehicles that are right  for your particular business and family situation, the following Wills and Trusts planning tools are essential for nearly all business owners.

1. Living Trust

Putting your company in a customized and thoughtfully prepared revocable living trust is one of the best ways to ensure your business’ continued success upon your eventual death or in the event of your incapacity. A living trust is a separate legal entity that effectively owns your share of the business, and allows you to document what will happen to your business when you can no longer run it yourself due to incapacity or death.

Unlike a will, assets properly included in a trust are not required to go through the court process of probate. Instead, those assets are promptly transferred to the person, or persons, of your choice in the event of your death or incapacity. In this way, a trust allows for the smooth transition of control of your company, without the time, expense, and potential conflict associated with probate or guardianship. 

Using a trust, you choose the individual(s) you want to run your company in your absence, whether that absence is permanent (your death) or merely temporary (your incapacity). Plus, trusts are not open to the public, so your company’s affairs and its assets would remain private, and transfer of ownership can take place in your lawyer’s office, not a courtroom.

2. Buy-Sell Agreement

If you share ownership of your business with one or more other people, you’ll want to put in place a buy-sell agreement. A buy-sell agreement ensures that upon certain conditions—such as your death or permanent incapacity—the other owners are able to purchase your shares of the business, or it can stipulate that your shares will pass to your heirs.

A properly prepared buy-sell agreement can prevent your family members from getting stuck owning a business they don’t want and can’t sell. And it also protects your surviving partners from being forced to deal with new owners they never planned on. The key to ensuring a buy-sell agreement works is to make sure it’s funded, usually with life insurance.

3. Life Insurance

Unless your business generates significant revenue—and will continue to do so upon your death—that income might not be enough to support the ongoing operation and financially provide for your family. By purchasing and properly structuring your life insurance, you can offer your family, team, and clients a financial safety net, while your loved ones finalize your affairs and your successor assumes control of the company.

If your business has multiple owners, you can pair life insurance policies on each partner with your buy-sell agreement. By doing so, your remaining partners can buy out your shares at a previously agreed-upon price, and the life insurance can help pay for the buyout, without leaving the business bankrupt.

4. Succession Planning

If you hope to pass control of your company to a loved one or team member, you’ll need to create a comprehensive business succession plan to ensure the company doesn’t fall apart when you die. Beyond merely naming your successor, a proper succession provides stability and security by allowing you to lay out explicit instructions for how the company should be run once you are no longer around.

From specifying how ownership should be transferred and providing rules for compensation of partners and team members to establishing dispute resolution procedures, an effective succession plan can provide the new owner with a detailed roadmap for your company’s continued success and growth.

Don’t Put Your Business & Family At Risk

Estate planning is every bit—if not more—essential to your company’s (and family’s) continued survival and success as any other issue facing your business. If you’ve yet to put your Will and Trust in place, consult with us, your local Family Business Lawyer™ today to take care of this vital responsibility.

And even if you have an existing plan, you should have us review it to make sure you’ve actually covered all of your bases and that your plan has been properly updated. We have a 50-point assessment we use to look at your plan, which needs to be updated to take into account changes in your life, assets, and the law. Taking these actions will not only help shield your company and family from unforeseen tragedy, but it will also give you the peace of mind needed to take your business to the next level. Schedule your appointment today to get your planning handled.

This article is a service of Legal Journeys, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. Call us today to schedule. 

 3 Solutions For Managing The Top Stressors Of Business Ownership

There are numerous advantages to running your own business: being your own boss, setting your own hours, getting to decide who you work with and what you work on. However, business ownership can also be one of the most stressful endeavors you’ll ever undertake in your life.

While running your own company will inevitably have its maddening moments no matter what, some of the major stressors can be successfully managed if you know how to effectively deal with them. Here are three of the most unnerving parts of owning your own business and how to handle them like a pro.

1. The Stressor: Lack Of Predictability
   
   You’d think that running your own business would mean you’re in control of everything, with no one else telling you what to do, how to do it, or when to do it. And you’d be right—mostly. Paradoxically, when you go into business for yourself, you’re in control of everything and nothing both at the same time.

With a steady 9-5 gig, you can count on consistent paychecks, predictable hours, a stable office location, and even regular vacations. But when you’re your own boss, consistency and predictability go right out the window.

Dealing with inconsistent income can be a major stressor, as you never know if you’re going to be able to pay your bills. Not only that, but it’s often the case that if you’re not working, the business is not functioning, making things like days off and vacations seem like a fantasy.

The Solution: While you can never eliminate the unpredictability of your income when you have a business, what you can and should do is know exactly how much money you will need and how many clients or customers you will need to hit your financial goals at a base level. By establishing clear goals based in the actual reality of what you need, you will be able to keep your time, energy, and attention focused on taking the actions necessary to hit your goals, rather than wasting your time, energy, and attention worrying and wondering about what you need to be doing on any given day, week, or month. 

One of the things we do with our business owner clients is to support with a review and update of your financial needs regularly, and then we help you look at whether your business is structured to meet your financial needs. We call this Money Mapping. Give us a call if you’d like to discuss how we can help you here.

2. The Stressor: Not Having Enough Time

Unpredictability and time management go hand-in-hand. Without a structured and enforced schedule to adhere to, it’s easy to get sidetracked by the day-to-day minutiae that comes with running a business. As Stephen Covey reminds us, it’s so easy to get caught up in the urgent matters, and forget the important matters. 

We all have the same 24 hours in a day, 7 days a week, but if you use them wisely, by becoming the boss of your calendar, you’ll find that you actually do have plenty of time, always.

Time management is the most important skill for business owners to master, since not having enough time to handle key tasks will freak you out and wreck your business at the same time. To this end, it’s vital to establish an effective way to budget your time and then stick to a schedule as if your life depended on it (since it actually does).

And though it may be impossible to do in the very beginning, make hiring a robust support staff a top priority, so you can eventually take time off when planned—or unplanned—events require you to step away from your business. 

The Solution: For scheduling, we favor a process of time management called “time blocking,” based in our Money Map process, and we’d be happy to teach it to you, as it’s the number-one tool we use to get so much done, and do it in a way that allows us to love our lives and our business, too. Here’s a taste… 

Turn time on its head and prioritize self-care and family time first. Do this by making a list of all of the self-care items that are vital to your health and well-being, and how much time you desire to allocate to them on a weekly and monthly basis. Then, make a list of all of the time you desire to spend with family each day and week. Block all of those times off on your calendar first. 

Then, it’s time to block time for your top business priorities, including time for administration or leadership of your team, time for sales, time for marketing, time for continuing education, and of course, and finally… time to serve.

By doing this, you’ll likely discover that you have much less time to serve than you thought when you initially priced your services (if you are in a service-based business), and may need to raise your fees. By professionalizing your business, you can do this. Contact us for support. 

3. The Stressor: No Work/Life Balance

Even if you’re one of those people who live for their work, if you don’t devote enough time to rest and self-care, both your work and personal life will suffer. Ironically, many people start their own business specifically to have more time for themselves, but once you see what’s actually involved, you’ll often find the business is the one who owns you—not the other way around.

Having an effective work/life balance is the key not only to being effective at your job, but also staying healthy and happy. Running a business can take a toll on your mental and physical health like nothing else, and if you don’t find a proper balance, it can lead to literally fatal outcomes.

The Solution: One of the first steps to finding work/life balance is to set realistic work hours and adhere to them just like any other job. When you work from home or don’t have a regular office, it’s easy to let “work time” eat into your “me time,” until all you have is “work time.”

Consider personal time just like your other top business priorities—set aside blocks of time for it, and stick to that schedule religiously. In addition to scheduling time to spend with your family and friends, also make time for rejuvenating self-care activities like exercise, meditation, hobbies, and other things (don’t forget sleep) that allow you to relax and recharge your batteries. Rather than seeing these things as distractions from work, you’ll ultimately find they’re essential for maximizing performance and productivity.

Finally, another way to reduce stress is to implement effective business systems that streamline your day-to-day operations. As your Family Business Lawyer™, we offer a number of turnkey solutions to give you maximum control over your business—and your mental health. What’s more, we will guide you through your toughest decisions, so you can rest easy knowing you’ve done everything to ensure your company is as secure and successful as possible.

Don’t Forget Your Foundation

Running a business also involves setting up the proper legal, insurance, financial, and tax (LIFT) systems, which form your company’s foundation and support your goals and objectives.

As your Family Business Lawyer™, one of our primary missions is to help small business owners put these cornerstone systems in place, providing your company with an unshakable foundation. To see how stable your LIFT foundation is right now, contact us, your Family Business Lawyer™ to take our free LIFT 20-Point Assessment.

This assessment will highlight the gaps in your current LIFT foundation that need the most attention. From there, you can meet with us, your Family Business Lawyer™ to conduct a more thorough audit and implement the full LIFT Foundation System and Toolkit. Contact us today to learn more.

This article is a service of Legal Journeys, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. 

When creating an Will and Trust, people are often most concerned with passing on the “big things” like real estate, bank accounts, and vehicles. Yet these possessions very often aren’t the items that have the most meaning for the loved ones we leave behind.

Smaller items, like family heirlooms and keepsakes, which may not have a high dollar value, frequently have the most sentimental value for our family members. But for a number of reasons, these personal possessions are often not specifically accounted for in wills, trusts, and other Wills and Trusts planning documents. 

However, it’s critical that you don’t overlook this type of property in your Will and Trust, as the distribution of such items can become a source of intense conflict and strife for those you leave behind. In fact, if you don’t properly address family heirlooms and keepsakes in your Will and Trust, it can lead to long-lasting disagreements that can tear your family apart.

Issues Raised By Passing On Heirlooms & Keepsakes

In the legal world, both heirlooms and keepsakes are considered “non-titled personal property.” As mentioned earlier, when there is no plan in place for the distribution of these items following the owner’s death, it can create bitter conflicts among family members. Indeed, fights over heirlooms and keepsakes can cause close family members to never speak with one another again.

In her book “Who Gets Grandma’s Yellow Pie Plate?” Professor Marlene S. Stum, an expert in family social science at the University of Minnesota, warns of the infighting that can occur when there’s no plan for who inherits these personal effects.

“What surprises many people is that often the transfer of non-titled personal property creates more challenges among family members than the transfer of titled property,” says Stum. “Research has shown that disputes over inheritance and property distribution are one of the major reasons for adult siblings to break off relationships with one another.” 

Given the potential trouble the distribution of heirlooms and keepsakes can cause for your heirs, you’ll want to take extra care in seeing that these family treasures are passed on properly. And this means incorporating them into your Will and Trust in one way or another. 

Strategies For Peacefully Distributing Heirlooms & Keepsakes
While there is no one perfect way to distribute these items in your Will and Trust, your primary goal should be to maintain harmony among your loved ones during an already emotional time. As with most sensitive issues, clear communication is vital to this process.

Because your family members can have vastly different values associated with certain heirlooms and keepsakes and you may have little idea about how each person feels, you should speak with each family member in advance. By talking with family members about their feelings and expectations regarding your possessions ahead of time, you will have a much better idea how to distribute these items to your loved ones with the least amount of conflict.

Additionally, you should decide ahead of time if you need to have any of your heirlooms or keepsakes appraised. In doing so, you provide your heirs with the necessary documentation to gauge the monetary value of these items, and you can save them from extra work while they are mourning your death. 

Again, the manner in which you distribute your heirlooms and keepsakes will depend largely on the items you have to pass on and your specific family situation. That said, here are a few Wills and Trusts planning strategies to consider when passing on these precious possessions.

Gifting during your lifetime: Of course, you don’t have to wait until you die to pass on your heirlooms and keepsakes, and you may prefer to give away certain special items while you are still living. By doing so, you get to personally witness the joy your loved ones experience when they receive the gift, and you can also personally explain the reasons you want each person to have a particular item.  

If your heirlooms and/or keepsakes have a high monetary value, you should keep gift tax issues in mind when you give them away. That said, the IRS has a high annual gift tax exclusion ($16,000 in 2022) and an equally high lifetime exclusion ($12.06 million in 2022), so few people will need to worry about such taxes.

Keep in mind, the lifetime exclusion amount will revert back to its pre-2018 level of around $5 million per individual in 2026, so if you are considering gifting high-value possessions, you may want to do it sooner, rather than later. In any case, if you have possessions you want to give away that might trigger gift taxes, meet with us, your Personal Family Lawyer® to discuss your options.

Include items in your Will and Trust using a personal property memorandum: As with other assets you want to pass on after your death, you should include heirlooms and keepsakes in your Will and Trust by adding them to your will or trust. The best way to do this is by using what’s known as a personal property memorandum.

A personal property memorandum is a separate document that is referenced in your will or living trust. The memorandum allows you to list which items you wish to leave to each individual and detail the reasons you are giving each item. In many states, if it’s properly incorporated into your will or trust, a personal property memorandum is a legally binding document.

Furthermore, unlike a will or trust, you can create and update your memorandum without a lawyer’s help. You can change your memorandum as many times as you like, just make sure you sign and date it each time to ensure authenticity. Your memorandum can be as long or short as you like, which allows you to account for even the smallest or seemingly insignificant possessions.

Most types of tangible personal property can be included in your memorandum, but it’s important to note that you cannot list certain assets in a memorandum, including titled property, such as real estate and vehicles; assets with a beneficiary designation, such as life insurance, 401(k)s, and bank accounts; or intellectual property, such as works protected by a copyrights or trademark. If you are unsure if you should include a certain possession in your personal property memorandum, consult with us.

Although you don’t need a lawyer to create or modify your personal property memorandum, if you need any help or support with yours, reach out to us, your Personal Family Lawyer®. That said, you should always enlist our assistance if you’d like to create or update your will or trust.

Pass on the values & stories behind the possessions: You may want to consider making audio recordings to accompany your heirlooms and keepsakes. In this way, your loved ones not only get to hear your voice, but they will also be able to learn the stories behind the possessions, as well as the reasons why you gave each person a particular item.

These stories not only help connect you with future generations, but having a strong family narrative also helps young people develop strong personal identities and boosts their self esteem. In the New York Times article, “The Stories that Bind Us,” author Bruce Feiler comments on this phenomenon: “The more children knew about their family’s history, the stronger their sense of control over their lives, the higher their self-esteem, and the more successfully they believed their families functioned.” 

Best of all, you don’t have to worry about creating these recordings yourself, as we offer this exact service during our Family Wealth Legacy Interviews. In every Will and Trust we create for our clients, we will personally guide you to create a customized recording for the people you love, and then we will provide you with the recording digitally to ensure it will survive long after you are gone.

Don’t Let Anything Fall Through The Cracks
Of course, if no one can find your heirlooms and keepsakes, they aren’t going to do anybody any good. For this reason, it’s vital that you create and maintain a comprehensive inventory of all of your assets, including each of your family heirlooms and keepsakes. Fortunately, this is another service we offer all of our clients at no additional charge. Indeed, we will not only help you create a comprehensive asset inventory, we have systems in place to make sure your inventory stays consistently updated throughout your lifetime. 

To learn more and get your inventory started for free right now, visit the Personal Resource Map website to watch a webinar by Ali Katz, founder of Personal Family Lawyer®. Then, schedule a meeting with us, your local Personal Family Lawyer® to incorporate your inventory with your other Wills and Trusts planning strategies. 

Keep The Peace After You Are Gone
To ensure your heirlooms and keepsakes don’t create any unnecessary conflicts among your heirs, make sure that your Will and Trust includes all of your assets, especially your family heirlooms and keepsakes. As your Personal Family Lawyer, we can support you to ensure these precious treasures are protected and preserved as part of your Life & Legacy Plan, and that they pass to each of your loved ones in exactly the manner you would want, without causing a family feud. Contact us today to learn more.

This article is a service of Legal Journeys LLC, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Lawsuits are common occurrences in today’s society, and even people who have done nothing wrong may be on the receiving end of one. If you are sued, your traditional homeowners or auto insurance will likely offer you some liability coverage, but those policies only cover you up to a certain dollar amount before they max out. You can be held personally liable for anything beyond that limit. For this reason, you should consider adding an extra layer of protection by investing in personal liability umbrella insurance.

An Extra Level Of Protection

Umbrella insurance offers a secondary level of protection against lawsuits above and beyond what’s covered by your homeowners, auto, watercraft, and other personal insurance policies. Umbrella policies can cover a wide array of potentially ruinous costs related to a lawsuit, such as medical bills, legal fees, lost wages, court costs, and other expenses.

For example, say you cause a car accident in which multiple people are seriously injured. Their medical bills total $800,000, which exceeds the $250,000 in your auto insurance policy limits. This is where umbrella insurance kicks in. The umbrella policy will pay for the remaining $550,000. Additionally, whether you win or lose, your legal fees would be covered.

But medical bills and legal expenses are only one potential expense you could face. In the above example, let’s say one of the injured parties is a highly paid executive who is unable to work for four months because of their injuries, so in addition to their medical bills, the person also sues you for lost wages totaling $80,000. Luckily, umbrella insurance would also cover you in this scenario.

Who Should Have Umbrella Insurance

Umbrella insurance is valuable for anyone who can afford it. If you are sued and a judgment is ordered against you for an amount that exceeds your insurance policy limits, the court can allow the plaintiff to go after your future earnings, potentially garnishing your wages for years. In this regard, umbrella insurance not only protects your current assets, but your future assets as well. Additionally, umbrella insurance is especially valuable if you fit into any of the following categories, which generally increases the likelihood of getting sued.

• You have a swimming pool, hot tub, trampoline, playground set, or other potentially hazardous recreational equipment.
• You have dogs, horses, cattle, or other large animals.
• You employ household staff.
• You frequently host large parties or other events in your home.
• You are a well-known public figure.

How Much Coverage Should You Have

Most people will be adequately covered with a $1 million umbrella policy. If you earn more than $100,000 a year or have more than $1 million in assets, you may want to invest in additional coverage. A good rule of thumb is to buy an umbrella policy with coverage limits that are at least equal to your net worth.

Keep in mind that, as mentioned earlier, if you are involved in a particularly large lawsuit, your future income and assets could be a risk as well. So even if you have fairly limited income and assets now, you should consider your future earning potential when purchasing coverage. This is especially important if you plan to go into a highly paid career field, such as medicine, law, or financial management.

How Much Does Umbrella Insurance Cost

Umbrella insurance is fairly inexpensive compared to other types of insurance. Most people can buy a $1 million umbrella liability policy for between $150 and $300 per year, according to the Insurance Information Institute. An additional million in coverage will run you between $75 and $100, and then you are looking at roughly $50 for every million in coverage beyond that.

The reason such policies tend to be inexpensive is that they only go into effect after your underlying homeowners, auto, watercraft, or other policy is exhausted. Given this, most insurers require you to have at least $250,000 in liability on your auto policy and $300,000 on your homeowners before they’ll sell you a $1 million umbrella policy.

How To Purchase Umbrella Insurance

You can buy an umbrella policy from the same insurance company you use for your other home and business policies. In fact, some companies require you to purchase all of your policies from them in order to obtain umbrella coverage. If your current insurance company offers umbrella coverage, you may qualify for a discount for bundling all of your policies. Of course, you can also purchase a stand-alone umbrella policy, so shop around for the best rates.

Better Safe Than Sorry

Accidents happen all the time. To make certain your family’s current and future wealth has the maximum level of protection, consult with us, your Personal Family Lawyer® to determine if umbrella insurance is right for your particular situation. Contact us today to schedule your appointment.

This article is a service of Levi Alexander, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Photo by lucas souza: https://www.pexels.com/photo/woman-holding-umbrella-while-holding-girl-s-hand-2839411/

When you become a parent, your children become a large part of your world and it makes sense that you would want to proved for them, even after you are gone. However, without taking the proper precautions the wealth you set aside for them to inherit is at serious risk of being accidentally lost or squandered due to common life events, such as divorce, serious debt, devastating illness, and unfortunate accidents. In some cases, a sudden windfall can even wind up doing your kids more harm than good.

As your Personal Family Lawyer firm®, in our planning process we always offer parents the option of creating a Lifetime Asset Protection Trust for their children’s inheritance. These unique trusts are able to safeguard your kids’ inheritance, and the best part of these trusts is that they offer your kids the best of both worlds: an airtight asset protection and the ability to use and control their inheritance. You can even provide your heirs with a unique educational opportunity in which they gain valuable experience managing and growing their inheritance.

Not Only For The Super Rich

Contrary to what you might think, Lifetime Asset Protection Trusts are not just for those with massive wealth. In fact, these trusts are even more useful if you’re leaving a relatively modest inheritance because they can be used to educate your children about how to grow your family wealth instead of quickly blowing through it. Without such guidance, most people blow through their inheritance very quickly. In fact, one study found that, on average, an inheritance is totally gone in about five years due to debt and poor investment. Another study found that one-third of people who receive an inheritance actually had a negative savings within just two years. Not to mention, the smaller the inheritance, the more at risk it is of getting wiped out by a single unfortunate event.

Not All Trusts Are Created Equal

When it comes to leaving an inheritance, most lawyers will advise you to place the money in a revocable living trust, which is a great move. However, most lawyers would have you distribute the trust assets outright to your loved ones at specific ages, such as one-third at 25, half of the balance at 35, and the rest at 40. Check your own trust now to see if it does this or something similar.

The problem with giving outright ownership of the trust assets in this way is that it puts everything you’ve worked so hard to leave behind at risk. While a living trust may protect your loved ones’ inheritance as long as the assets are held by the trust, once the assets are disbursed to the beneficiary they can be lost to future creditors, a catastrophic accident or illness, divorce, bankruptcy, or a major lawsuit.

Rather than risking their inheritance by leaving it outright to your children at certain ages or following certain life events, such as graduating college, you can gift your assets to your children at the time of your death using a Lifetime Asset Protection Trust. Therefore, if your kids ever get divorced, file bankruptcy, have a major medical issue, or are ordered to pay damages in a lawsuit, they can’t lose their inheritance. A Lifetime Asset Protection Trust can be built into a revocable living trust, which becomes irrevocable at the time of your death and holds your loved one’s inheritance in continued protective trust for their lifetime.

Here’s how it works: A Trustee of your choice holds the trust assets upon your death for the benefit of your child or children. Because a Lifetime Asset Protection Trust is discretionary, the Trustee has the power to distribute the assets at their own discretion, instead of being required to release them in a rigid structure. This discretionary power enables the Trustee to control when and how your kids can access their inheritance, so they’re not only protected from outside threats like ex-spouses and creditors, but from their own poor judgment as well.

A Lifetime Of Guidance & Support

Given that distributions from a Lifetime Asset Protection Trust are 100% up to the Trustee, you may be concerned about the Trustee’s ability to know when to make distributions to your child and when to withhold them. Granting such power is vital for asset protection, but it also puts a lot of pressure on the Trustee.

To address this issue, you can write up guidelines to the Trustee, providing the Trustee with direction about how you’d like the trust assets to be used for your beneficiaries. This ensures the Trustee is aware of your values and wishes when making distributions, rather than simply guessing what you would’ve wanted which often leads to problems down the road.

In fact, many of our clients add guidelines describing how they’d choose to make distributions in up to 10 different scenarios. These scenarios might involve the purchase of a home, a wedding, the start of a business, and/or travel. Some clients choose to provide guidelines around how they would make investment decisions, as well. This is something we can support you with if you decide to use a Lifetime Asset Protection Trust.

An Educational Opportunity

Beyond these benefits, a Lifetime Asset Protection Trust can also be set up to give your child hands-on experience managing financial matters, like investing, running a business, and charitable giving, and they will learn how to do these things with support from the Trustee you’ve chosen to guide them. This is accomplished by adding provisions to the trust that allow your child to become a Co-Trustee at a predetermined age. Serving alongside the original Trustee, your child will have the opportunity to invest and manage the trust assets under the supervision and tutelage of a trusted mentor.

You can even allow your child to become Sole Trustee later in life, once they have gained enough experience and are ready to take full control. As Sole Trustee, your child would be able to resign and replace themselves with an independent trustee, if necessary, for continued asset protection.

Regardless of whether or not your child becomes Co-Trustee or Sole Trustee, a Lifetime Asset Protection Trust gives you the opportunity to turn your child’s inheritance into a valuable teaching tool. Do you want to give your child the ability to leave trust assets to a surviving spouse or a charity upon their death? Or would you prefer that the assets are only distributed to their biological or adopted children? You might even want your child to create their own Lifetime Asset Protection Trust for their heirs. We offer you a wide variety of options that can be tailored to fit your particular values and family dynamics. Be sure to ask us which options might be best for your particular situation.

Find Out If A Lifetime Asset Protection Trust Is Right For Your Family

Of course, Lifetime Asset Protection Trusts aren’t for everyone. If your kids are going to spend the vast majority of their inheritance on everyday expenses and consumables, a Lifetime Asset Protection Trust probably don’t make much sense. However, if you want the assets you are leaving behind to be invested and grown over the long term, even though their own business or investments, such a Trust can be immensely valuable.

When you meet with us, your Personal Family Lawyer®, we will work with you to look at your family circumstances and your assets to decide together if a Lifetime Asset Protection Trust is the right option for your loved ones. In the end, it’s not about how much you’re leaving your heirs that matters. It’s about ensuring that what you do pass on is there when it’s needed most and put to the best use possible. Schedule a Family Wealth Planning Session today to learn more.

This article is a service of Levi Alexander, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Photo by Gustavo Fring: https://www.pexels.com/photo/happy-people-hugging-each-other-7489235/