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Estate Planning 101: What You Need to Know

Have you done any estate planning? If you have a will, kudos to you! You’re ahead of so many people and celebrities who die without a will, creating unnecessary expenses and stress and risking family fights over assets large and small. However, a recent article from Kiplinger, “The Basics of Estate Planning,” reminds us of the importance of regularly updating estate planning documents and beneficiary designations.

Failing to do so could put heirs in a financial and legal tangle after you die or create unexpected tax consequences. You might also leave your assets to a wrongful heir, and your family might be unable to do anything about it.

What makes up the foundation of an estate plan?

The will directs your wishes to distribute assets to heirs upon your death. It’s not as straightforward as expected, so talk with an estate planning attorney to create a valid will. For instance, you don’t want to include anything you don’t want the public to know, like account numbers or passwords. The will becomes a public document when it is submitted to probate court.

A living trust, sometimes called a revocable trust, is used to own assets in a more private manner. You can put cash, securities and other assets into a trust, and the trustee, who you name to manage the trust, will be in charge of distributing assets after you die.

A living will, sometimes called an advance healthcare directive, outlines your wishes for care if you become incapacitated or for end-of-life care. This includes medical decisions like keeping you alive via artificial means, from respirators to feeding tubes. Letting your family know your wishes will spare them a lifetime of guessing what you want.

Powers of Attorney for finances and healthcare (also known as a healthcare proxy) names others to act on your behalf to manage financial and healthcare matters. Without these documents, your family may have to go to court to manage your bills and be part of your healthcare decisions.

Today’s estate plan also includes digital assets. You can designate a person as your Digital POA so they can access digital assets like emails, websites and social media accounts. They’ll need to be someone you trust and who can navigate the digital world.

All these documents need to be reviewed regularly to ensure that they align with your wishes and are current concerning any changes in the law. Most estate planning attorneys will advise you to update your documents whenever there is a big change in your life like birth, death, divorce, or a move to a new state. They should also be reviewed every three to five years as laws change.

Assets also pass through beneficiary designations. These are commonly retirement accounts and insurance policies, which ask you to name a person to receive the assets upon your death. These assets don’t go through probate. People often forget to update these documents, and old friends and ex-spouses find themselves with a surprise windfall.

It’s essential to update estate planning documents and beneficiary designations on the death of a spouse. This is not likely the first thing on your mind when grieving the loss of a loved one, but it is necessary.

The rules for inherited IRAs have changed. Therefore, your heirs need to be prepared for the impact, especially if your estate includes a large IRA. As a result of the SECURE Act of 2019, adult children or non-spouse heirs of a traditional IRA must empty the IRA within ten years of the original owner’s death. During the ten years, heirs must take annual withdrawals and pay taxes on those withdrawals as income. The alternative is to take the entire IRA at once and pay taxes on the whole account. This rule doesn’t apply to surviving spouses, who have more options.

Think of your estate plan as a gift to loved ones after you’ve passed. Without one, they may need to go to court, wait months or years to receive their inheritance or devote endless hours working on gaining control and distributing assets. Talk with an experienced estate planning attorney to protect your family and legacy.

Reference: Kiplinger (Oct. 1, 2024) “The Basics of Estate Planning”

Estate Planning Lessons from Mickey Mouse and Cinderella

At the center of every fairy tale is a human story centered around basic life experiences, as any English major will tell you. Therefore, it’s no surprise that the stories and characters from Disney hold life lessons for estate planning, as described in a recent article, “9 Estate Planning Lessons From Disney Movies,” from Forbes.

For a blended family story, look no further than Cinderella. When her father died and left his estate to an evil stepmother with two equally wicked daughters, he may not have thought of the impact it would have on poor Cinderella. By structuring the estate plan to provide for his daughter from the first marriage, he could have prevented Cinderella from being economically dependent on her stepmother. Leaving a portion to Cinderella and the remainder to the stepmother could have ended the story long before the prince entered the picture. Putting assets into a trust for Cinderella and naming a neutral party as trustee is another option her father could have explored.

Snow White’s seven dwarfs is a tale of planning for dependents. Each dwarf has their own behavior traits and needs, just as children do. For minors or children with special needs, unique circumstances need to be addressed by estate planning. Parents need to put a clear guardianship plan in place to protect dependents and be sure they are cared for by people who understand their needs. Without a plan, which includes a will naming guardians and a Special Needs Trust if appropriate, the court may appoint a guardian who might not be a good fit for the child. Establishing trusts can ensure that funds are available for education and living expenses, adding another person looking out for the child.

Who better represents incapacity than Sleeping Beauty? Facing a health crisis in which people can’t make their own decisions requires planning. A financial power of attorney and healthcare proxy ensure that someone you know and trust will be able to act on your behalf if you should eat a poisoned apple and fall into a deep sleep. By planning for incapacity, you can prevent court intervention and ensure that your healthcare choices are followed.

The Princess and the Frog exemplifies the need for good business succession planning to ensure that the business has a future. Does a business owner want to pass the business on to the next generation or sell it? This requires planning for taxes and estate planning. How should assets be gifted to minimize tax liabilities?

Failing to have an estate plan often leads to a sad ending for family members. Without it, there’s no guarantee of a kind-hearted prince or magical enchantress stepping in to make things right. Consult with an experienced estate planning attorney to protect your children and yourself from the twists and turns of life.

Reference: Forbes (Sept. 27, 2024) “9 Estate Planning Lessons From Disney Movies”

Can I Get Paid as a Caregiver for Mom?

Caring for an aging parent is one of the most rewarding yet challenging responsibilities a person can take on. However, it may require reducing your commitment to other work. Learning how to get paid as your mother’s caregiver is often essential to making the arrangement work.

What are Your Mother’s Needs?

The first step is understanding the level of care that your mother requires. Does she need help with daily activities like cooking, bathing and dressing, or are her needs more medical in nature? Creating a plan based on her specific needs will help you understand what you can do yourself and what might require outside help.

Some helpful questions to ask yourself:

  • How much time can I realistically commit to her care?
  • Are there tasks I may need help with, such as managing medications or mobility assistance?

Answering these questions will give you a clear idea of what kind of care is necessary and where to seek help.

Can You Get Paid to Be a Senior Caregiver?

While caring for a parent can be emotionally fulfilling, it can also become financially challenging, especially if you are sacrificing work hours to take on caregiving responsibilities.

In some cases, yes, you can be paid as a family caregiver. Certain state and federal programs offer financial support to people caring for an aging parent, according to Elder Law Answers.

Do Medicaid Benefits Pay Family Caregivers?

Medicaid offers programs in all 50 states that allow families to direct their own care services. This means your mother may be able to choose you as her caregiver instead of hiring an outside agency. The details of these programs vary from state to state, so it’s essential to contact your state Medicaid office to find out what’s available where you live.

For example, in some states, Medicaid offers waivers that allow family caregivers to be compensated. These programs may also have income and asset limits, so ensuring that your mother meets the qualifications is important.

How Can Veterans Benefits Help?

If your mother or father is a veteran, you might be eligible for additional support through the Department of Veterans Affairs (VA). Programs like the Aid and Attendance (A&A) benefit provide financial assistance for caregiving. Veterans or their surviving spouses who meet certain qualifications can receive payments to cover caregiving costs.

Can You Get Paid as a Caregiver for Your Mom?

Being a caregiver for your mom can be both rewarding and overwhelming. Luckily, some options may provide financial relief. According to AARP, family caregivers often incur out-of-pocket costs that add up to thousands of dollars per year, leading many to seek compensation for their efforts. Programs such as Medicaid’s self-directed services allow qualified individuals to hire family members as caregivers.

How Do You Apply for Caregiver Support?

Once you’ve identified potential programs that may pay you as a caregiver, the next step is applying. Each program will have specific requirements and application procedures. Here’s what you need to do:

  1. Assess your mother’s needs: This may include an official assessment from a healthcare provider to determine the level of care required.
  2. Gather documentation: Depending on the program, you might need medical records, proof of income and other documents.
  3. Contact your local Area Agency on Aging: These organizations provide valuable resources, including information on available support programs in your area.
  4. Apply to the appropriate program: Once you’ve gathered all necessary paperwork, submit your application and follow up on its status.

Should You Hire an Elder Law Attorney?

Medicaid, veterans’ benefits and other state programs are individually complex; together, they seem impenetrable. However, you don’t need to figure it out on your own. An elder law attorney can help you understand your rights and guide you through the application process.

Request a Consultation to Get Started

If you are ready to explore becoming a caregiver for your mom, understanding all your options, including financial support, is essential. Contact us today to schedule a consultation with an elder law attorney. We can help you create a plan that protects your mom’s health and your family’s financial well-being.

Key Takeaways:

  • Understand caregiving needs: Assess your mom’s situation to determine the level of care she requires.
  • Explore financial options: Medicaid and veterans’ programs may offer compensation for family caregivers.
  • Apply for assistance: Follow the steps to qualify for state and federal support programs.
  • Seek legal guidance: Consulting an elder law attorney ensures that your caregiving plan is sound and compliant with regulations.
  • Plan: Regularly review and adjust your caregiving approach as your mom’s needs evolve.

References: Elder Law Answers (Sept. 5, 2024) “Where Do I Start to Become a Caregiver for My Widowed Mom?” and AARP (Oct. 15, 2021) “Can I Get Paid to Be a Caregiver for a Family Member?“

Should I Hire a Lawyer When Starting a Business?

Starting a business is an exciting journey but comes with many decisions and responsibilities. One question that often comes up is whether you need to hire a business lawyer. It might seem like an extra expense. However, having legal guidance can save you a lot of trouble down the road. Find Law explores when hiring a lawyer makes sense and when you can handle things independently.

What Business Matters can I Handle on My Own?

When starting a business, there are a few tasks you can likely tackle without the need for a lawyer. While every situation is different, some aspects of business planning don’t require professional legal assistance.

Writing Your Business Plan

A well-organized business plan is essential for securing funding from banks or investors. It outlines your mission, target market, business opportunities and financial projections. Although this step is critical, many entrepreneurs can create a business plan without legal help. However, if you want peace of mind, a business lawyer can review your plan to ensure that it meets legal standards.

Choosing and Registering Your Business Name

Picking the perfect business name is a big deal. It is your brand’s identity. Before committing to a name, you’ll want to ensure that it isn’t already in use. A business lawyer can help you conduct a thorough trademark search to avoid potential legal issues in the future.

Once you’ve chosen your name, registering it under a “Doing Business As” (DBA) can usually be done without legal help. However, having a lawyer check everything can be reassuring.

Applying for an Employer Identification Number (EIN)

An EIN is required to file taxes, open business bank accounts and pay employees. Fortunately, applying for an EIN is something you can easily do on your own through the IRS website. In most cases, this is a straightforward process that doesn’t require legal assistance.

When Should I Hire a Lawyer?

While there are tasks you can manage independently, some legal matters are best handled by a business lawyer. These issues can be complex and costly to fix if not done correctly from the start.

Choosing the Right Business Structure

Choosing the right structure for your business is one of the most critical decisions you’ll make. Whether you go with a sole proprietorship, LLC, corporation, or partnership will have lasting impacts on taxes and liabilities. A business lawyer can help you understand the pros and cons of each option and recommend the best fit for your situation.

Drafting Contracts and Agreements

Having clear and legally sound agreements, from partnership agreements to employee contracts, is essential. A lawyer can draft these documents to protect your interests and avoid conflicts later. These can include employment agreements, sales contracts and even confidentiality agreements to safeguard your business’s sensitive information.

Protecting Intellectual Property

If your business creates unique products, branding, or inventions, protecting your intellectual property (IP) is crucial. A business lawyer can help you to secure trademarks, copyrights, or patents to ensure no one else can profit from your hard work. While this process can be complex and time-consuming, it’s an area where legal help is often necessary.

Should I Hire a Lawyer for Lease Agreements?

You must sign a lease agreement if your business requires office or retail space. Lease terms can be tricky. Therefore, signing without fully understanding the fine print could cause problems. A business lawyer can review the agreement to ensure you get a fair deal and that the lease protects your interests.

How Should I Protect My Personal Assets?

One of the main reasons entrepreneurs hire a lawyer when starting a business is to protect personal assets. Without the right structure, your personal bank accounts, home and other assets could be at risk if the business faces lawsuits or financial trouble. A business lawyer can guide you in setting up your company in a way that shields your personal property from business liabilities.

Avoiding Legal Trouble

No one starts a business thinking they’ll get sued. However, it’s always a possibility. A lawyer can help you take preventive measures, such as drafting clear contracts, setting up proper company policies and ensuring that you follow all regulations. Having legal counsel can help you avoid the headache and expense of lawsuits.

How Can a Lawyer Help Me with Taxes?

While you might not think of taxes when you first launch your business, they play a significant role in your overall success. A lawyer can explain tax benefits, deductions and liabilities for your specific business structure. They can also help if you expand your business into other states or countries, ensuring that you stay compliant with local tax laws.

Take the First Step Today

Starting a business involves many moving parts. Having a solid legal foundation can make all the difference. If you’re ready to take the next step in creating or growing your business, schedule a consultation with our law firm today. We can help you navigate the complexities of business planning and ensure that you’re protected every step of the way.

Key Takeaways:

  • Save time and avoid mistakes: A lawyer can handle complex legal tasks, such as choosing the right business structure and drafting contracts.
  • Protect your assets: Ensure that your personal property is shielded from business liabilities.
  • Prevent future legal troubles: A business lawyer can help you to avoid costly lawsuits and ensure regulatory compliance.
  • Protect your intellectual property: Secure trademarks, patents and copyrights with professional legal guidance.
  • Gain peace of mind: With a lawyer’s help, you’ll have confidence that your business is legally sound from the start.

Reference: Find Law (May 23, 2024) “Do I Need a Lawyer To Start a Business?“

Why Gen Z Needs to Pay Attention to Estate Planning

Gen Zers may still be young, ages 17–27. However, this doesn’t mean some don’t have ownership and assets to protect with estate planning. Medical emergencies and car accidents happen to people of all ages. An estate plan protects the person as much as their property. The sooner you have a plan in place, says a recent article from yahoo! finance, “Why Gen Z Should Be Thinking About Estate Planning,” the better.

For many young adults, estate planning is like buying rental insurance. You don’t expect to deal with a fire or have your home broken into. However, having insurance means if such events happen, your possessions will be insured, and you’ll be made whole.

Gen Zers who are signed up for employee benefits like 401(k)s or retirement plans already have assets to be passed to another person if they should die young. These accounts typically feature beneficiary designations, so they should be sure to have those completed properly. Many Gen Zers name their parents or siblings as their beneficiaries at this point in their lives. The future may bring new relationships, marriage and children, so they must update these beneficiaries throughout life.

While practically everyone using a cell phone or computer has digital assets, Gen Zers are likely to have more digital currency and crypto in digital wallets. They may have intellectual property on platforms, including TikTok or YouTube. These assets need to be protected in a digital estate plan. The information required to access these accounts should not be in a last will and testament. However, they should be documented so the assets are not lost.

Other digital assets don’t have any value. Users don’t have the right to transfer the assets, like social media accounts or music files. Having a conversation with a digitally savvy person about these assets and providing them with login and account information is an integral part of an estate plan.

Gen Zers do need a will. Without a will, the estate will get tangled up in probate, a court process where the laws of your state determine who inherits any possessions. This takes time and court fees can add up quickly.

Having a will created with an experienced estate planning attorney encourages a review of assets, providing a perspective of finances that one might not otherwise have early in their career.

Estate planning also includes planning who will make medical and financial decisions in case of incapacity. These documents, including a Power of Attorney, Healthcare Proxy, Living Will and other documents, are state-specific. Once someone becomes a legal adult, neither parents nor siblings can be involved with medical care or handle finances, unless these documents are created and executed. Trusted friends can also take on these roles.

A young adult should make an appointment with a local estate planning attorney. They’ll provide guidance through the process. Regardless of age and stage, having a plan creates peace of mind for young adults and their family members.

Reference: yahoo! finance (Sept. 17, 2024) “Why Gen Z Should Be Thinking About Estate Planning”

Should I Give My Kid Their Inheritance Before I Die?

Some wealthy people have publicly declared their intention to give away their wealth before they die to see their philanthropy’s impact. However, these people usually don’t have to worry about making ends meet, unexpected medical bills, or expensive home repairs. A recent article, “How to Give an Inheritance While You’re Alive,” from Kiplinger, agrees that more than half of Americans in their 60s will need long-term care services at some point. Don’t rush to give away your kid’s inheritance just yet.

For most people, the solution is transferring wealth through estate planning, using a last will and testament. You won’t need the assets after death; your loved ones will be grateful for the bequest.

However, there are some downsides to hanging on to all of your assets while you’re living. If you’re lucky enough to live into your nineties, your “kids” may be in their sixties or seventies when you die. Their need for help with a deposit to buy a home will be long past.

It’s heart-warming to be able to help your family when they can use the help. You get to see how your hard work has helped the next generation. If you’re involved in charitable causes, a donation while you are living allows you to see the impact of your own giving.

Giving with warm hands or while living isn’t possible for everyone. If you think it might be possible, start by crunching the numbers. How much can you really afford to give away? You’ll need to be very intentional about planning. Just deciding to cut back on spending won’t be enough.

Your estate planning attorney may talk with you about using trusts. Creating and funding a trust means lowering your taxable estate, creating more wealth to pass onto heirs and, if you wish, having the trust distribute assets while you’re living. If you use a living trust, you will be able to change the terms whenever you want. Therefore, if it becomes clear you will need the money, you have access to it.

You’ll also need to determine if you have enough funds to pay for long-term care or if you need to begin planning for Medicaid eligibility. A living trust is countable as an asset for Medicaid. However, a Medicaid Asset Protection Trust is not. Your estate planning attorney will help you plan this out.

Home equity is something Boomers, in particular, should consider when considering paying for long-term care. The proceeds from the sale of your home could cover the cost of long-term care. Another option is taking out a reverse mortgage, which lets you enjoy the equity in your home without selling the property.

In 2024, taxpayers may gift up to $18,000 to as many people as they want without incurring gift taxes or filing a gift tax return. Married couples may give up to $36,000 to as many people as they wish. If this might work with your retirement finances, it’s a good way to reduce your estate tax burden.

There are many strategies for making gifts while you’re living. Take a clear, objective look at how much you’ll need to enjoy your retirement years before making any big decisions. Talk with your estate planning attorney about how to make this happen. Congratulations—you’ll get to see your legacy in action if it’s something you can realistically do.

Reference: Kiplinger (September 1, 2024) “How to Give an Inheritance While You’re Alive”

How to Avoid Reverse Mortgage Scams that Target Seniors

Elder scams are becoming more frequent. US News recently shared the top 10 scams to watch out for. Reverse mortgage scams were among the worst. These scams can result in stolen home equity, leaving seniors in debt, or even homelessness. Understanding how these scams work and what warning signs to look for is the best way to avoid victimization.

What are Reverse Mortgage Scams?

A reverse mortgage is a loan designed for seniors aged 62 or older, allowing them to turn their home’s equity into cash. However, these loans can be complex and may easily cause more harm than good.

Reverse mortgage scams often involve scammers tricking seniors into using the equity in their homes only to steal the money. Scammers can be anyone from trusted family members to unethical contractors. According to Investopedia, reverse mortgage scams prey on seniors’ need for financial stability, making it seem like an easy solution.

Who Should I Be Wary of when Considering a Reverse Mortgage?

Anyone pushing you to sign up for a reverse mortgage quickly should raise a red flag. This can include vendors, contractors, or even family members who may have a financial interest in your decision.

Are Contractors and Vendors a Risk?

One of the more common reverse mortgage scams involves contractors suggesting home repairs or renovations and then recommending a reverse mortgage to pay for the work. Not only do they often offer subpar work, but a reverse mortgage is also rarely the best financial solution for you. Consider alternatives, like a home equity loan, if you genuinely need repairs and have no other way to pay.

Can Family Members Be Involved in Reverse Mortgage Scams?

Unfortunately, family members with a close link to an elder or with power of attorney may take advantage of seniors via reverse mortgage scams. Once they secure the mortgage, they may steal the proceeds, leaving the senior homeowner with a mountain of debt. Even more alarming, some scammers have obtained reverse mortgages in the names of deceased relatives.

Before giving anyone power of attorney over your affairs, ensure that you completely trust them. Don’t stop at trust; verify their integrity by monitoring all financial activity tied to your name. This way, you can avoid unauthorized loans or decisions on your behalf.

What are Flipping Frauds?

Scammers sometimes convince seniors to take out a reverse mortgage on their current home to buy another property, often under the guise of a great investment opportunity. However, these new homes are usually in poor condition and not worth the money.

The scammer helps you obtain a reverse mortgage and then finds a way to keep the proceeds for themselves. These scams can leave elders in bad financial shape, with a home that’s not fit to live in.

Can High-Pressure Sales Be a Warning Sign?

Scammers may rush you into signing paperwork or insist that a reverse mortgage is your only option without fully explaining the potential downsides. Legitimate lenders will give you the time and information you need to make an informed decision. If a lender makes you feel uncomfortable or rushed, walk away.

Can I Protect Myself from Reverse Mortgage Scams?

There are several steps you can take to protect yourself from falling victim to reverse mortgage scams:

  1. Get Professional Advice: Talk to a trusted financial advisor or attorney before committing to a reverse mortgage. They can help you weigh your options and ensure that the decision is in your best interest.
  2. Be Cautious of Offers from Strangers: Never trust unsolicited offers, whether from contractors, vendors, or phone calls. Always seek out services on your own.
  3. Understand the Details: Make sure you fully understand the reverse mortgage terms. Scammers often count on the complexity of these loans to confuse homeowners.
  4. Report Suspicious Activity: If you suspect a scam, immediately report it to the authorities. Taking action can help protect others from falling into the same trap.

Protect Your Home and Future from Reverse Mortgage Scams

A little preparation today can bring you and your family lasting security. If you or a loved one are at risk for elder scams, schedule a consultation with our law firm today. We can help you understand your options and create a plan that protects you from elder scams and reverse mortgage fraud.

Key Takeaways:

  • Understand the risks: Reverse mortgage scams target seniors, often leading to serious financial harm.
  • Avoid unsolicited offers: Be cautious of contractors or vendors suggesting reverse mortgages for home repairs.
  • Protect yourself legally: Carefully review all documents and consult a trusted attorney before signing anything.
  • Monitor power of attorney: Ensure that those managing your affairs are trustworthy and acting in your best interest.
  • Report suspicious behavior: Report suspected scams immediately to prevent further financial abuse.

References: U.S. News (Feb. 2, 2024) “10 Common Scams That Target Seniors and How to Avoid Them | Retirement | U.S. News” and Investopedia (May 16, 2024) “Beware of These Reverse Mortgage Scams”

Inheriting the Family Business: Succession Planning Secures Your Legacy

Preserving a family business’s legacy is challenging. Studies show that only about one-third of family businesses make it to the second generation. The numbers have been declining over the years, and one major reason is the lack of proper business succession planning.

Without a clear plan, businesses are more likely to fall apart during leadership transitions.  How can you prepare the next generation to successfully take over the family business?

Why Don’t Family Businesses Survive?

There are several reasons why family businesses struggle to stay within the family. One common issue is that the older generation often avoids discussing succession plans, hoping everything will fall into place naturally.

However, without a solid plan, when leadership needs to change, chaos can ensue.  Younger family members might also not feel ready or willing to take on the responsibility of running the business.

What Could Happen without a Business Succession Plan

Many business owners believe that their children or relatives will smoothly step into leadership roles. However, this isn’t always the case. Sometimes, younger family members aren’t allowed to learn critical skills, like decision-making and management, because the older generation maintains strict control. This lack of preparation can leave younger members feeling overwhelmed when it’s their turn to lead.

Running a family business can also seem like a burden. For some, the idea of constant problem-solving and stress may deter them from stepping into leadership roles. Younger generations may opt out of continuing the family tradition without excitement or encouragement.

Passing on the Family Business Successfully

The Harvard Business Review shared a story that highlights the importance of preparation. In one case, a family business expected one sibling to take over the company. Unfortunately, a tragic accident left that sibling unable to fulfill this role. The other sibling had no experience in the business but had to step in regardless.

This is one of many situations that can compromise your legacy. The article also discussed parents not properly including their children in decision-making, leaving them without leadership skills.

Depending on their parents’ relationship with work, children may be turned off by the perception of too much work for too little reward. Frank, honest conversations about the future are one key step in establishing a firm business legacy.

How Can You Prepare the Next Generation?

Passing on a family business doesn’t have to be stressful or uncertain. There are many ways to ensure that younger generations are ready to take over when the time comes. Consider the questions below to help you decide how to prepare your family for a successful business succession.

1.   Do Your Children Understand the Business?

Successful business succession planning requires that your successors know how the business operates. This can start at a young age by encouraging children to visit the workplace, meet employees and get a feel for the environment. They can begin with minor roles to gain deeper familiarity. However, you’ll eventually need to take their experience to the next level.

2.   Are They Gaining Leadership Experience?

Future leaders can’t just show up at the business and have functional roles. If you want someone to inherit the business, you need to give them decision-making responsibilities in different areas of the company. Having your children gain work experience outside the business may also be valuable.

3.   Do They Understand the Company’s Goals?

Regular conversations about the company’s mission, challenges and successes can help younger family members see the bigger picture. When they understand the company’s goals, they’ll be more prepared to make decisions that align with its future growth.

4.   Are You Setting a Good Example as the Business Owner?

Family businesses often involve close relationships and, at times, family conflict. Parents and business owners need to set clear expectations about business behavior and manage personal needs.

5.   Is There a Plan for the Future?

Most importantly, a clear business succession plan should be put in writing. This plan will outline who will take over leadership roles, their responsibilities and how the transition will occur. Without a formal plan, the business risks falling apart when it’s time to hand over the reins.

Act Today to Protect Your Family Business

Business succession planning is essential for the long-term success of a family-owned business. Whether your children are ready to step in or you’re just starting to think about the future, having a well-thought-out plan in place is key to keeping the business alive for generations to come.

Contact our firm today to schedule a consultation and learn more about how business succession planning can protect your company’s legacy for years to come.

Key Takeaways:

  • Understand the Business: Involve younger generations early to familiarize them with the company.
  • Build Leadership Experience: Offer opportunities for decision-making and managing key areas.
  • Align with Company Goals: Share the mission and values to ensure that decisions support the company’s future.
  • Set Clear Expectations: Address family dynamics to prevent conflicts from affecting business operations.
  • Formalize the Plan: Create a written succession plan to ensure a smooth leadership transition.

Reference: Harvard Business Review (Sep. 27, 2022) “How to Prepare the Next Generation to Run the Family Business”

Family Wealth Discussions: How to Talk about Money with Loved Ones

It can be tricky to talk about money with your family. Whether it’s financial planning, wealth management, or future inheritance, many people feel uncomfortable addressing the topic. Yet, as Morgan Stanley outlines, having these discussions is crucial to preparing for the future.

Why Is it Hard to Talk About Money?

Before diving into how to have these conversations, it’s essential to understand why they’re often avoided. Many families avoid discussing money because it brings up complicated emotions, such as embarrassment, guilt, or shame.

Parents might hesitate to discuss their wealth with children, fearing it could affect their values or ambition. Conversely, adult children may avoid asking their parents about their finances for fear of overstepping boundaries.

Understanding these emotional barriers is the first step to overcoming them. The key is approaching the conversation with sensitivity and openness, focusing on long-term goals rather than current financial details.

How to Talk to Your Children about Money

Talking to your children about family wealth can be as challenging as speaking with parents. Many parents fear sharing too much information about money will affect their children’s work ethic or sense of responsibility.

However, having open conversations about money can help your children develop a healthy understanding of financial responsibility and family values. Start by discussing what money means to your family—why you’ve worked hard to earn it, what goals you have for it and what responsibilities come with managing it.

Rather than delivering a lecture, ask your children questions that encourage them to think about wealth and responsibility. You might ask, “What does it mean to be wealthy?” or “Why do you think financial planning is important?”

How to Approach the Topic with Your Parents

Approaching a conversation about money with aging parents can be intimidating. However, handling it with care is important. Rather than diving straight into numbers and documents, ease into the discussion by asking them about their thoughts on long-term care, retirement and other financial concerns.

Frame the conversation around ensuring that their wishes are respected. For example, you might say, “I want to make sure we’re all prepared in case anything happens and that your wishes are honored.”

Having a general idea of their financial situation and being prepared can help guide the conversation. Consider whether they have a will, a plan for long-term care, or any trusts. However, remember that the focus should be on understanding their desires and values, not just the details of their finances.

Why Family Wealth Discussions Matter

Family wealth discussions are more than just talking about dollar amounts; they are about ensuring that everyone understands the values and goals behind the money. Talking openly with your family about finances can relieve stress, align expectations and ensure that everyone’s values are respected.

Ensure Your Family’s Financial Future with a Thoughtful Money Discussion

If you are unsure how to begin these critical conversations, consider seeking professional guidance. An estate plan can provide peace of mind for you and your family. Schedule a consultation with our law firm today to learn how we can help you prepare for these conversations and plan.

Key Takeaways:

  • Start early: Don’t wait for a crisis to discuss money with your family.
  • Be open and respectful: Focus on long-term goals and family values rather than the numbers.
  • Engage your children: Ask open-ended questions to encourage discussion about money and values.
  • Get professional support: Consult an estate planning attorney to guide these important conversations.

Reference: Morgan Stanley (2018) “How to Have Meaningful Family Conversations About Money”

Estate Planning for the Family Vacation Home

Many families enjoy owning a vacation home, where generations gather, and memories are made. The second home is part of the family’s legacy, and the hope is that it will continue over many years. Making this happen is the subject of a recent article, “Legal East: Legacy planning for your shore house,” from Daily Local News.

Let’s say the house is to be left to more than one heir. How will the expenses for maintenance be paid? How will the heirs devise a schedule for all owners to use the house? What would happen if the house needs major work and only one owner has the money to pay for it?

Discussing how to structure the ownership of the home with an experienced estate planning attorney is important, as there are many options. The home could be owned in a trust, as a business entity like an LLC, or owned outright by one or more family members. Determining which type of ownership to use becomes important as the owner’s age.

If one of the vacation homeowners is elderly and needs long-term care, the home’s ownership may become problematic if they need to apply for Medicaid. Most people don’t think about this until they are faced with the problem. The vacation property will be a countable resource unless ownership is structured correctly before applying for Medicaid. Transferring ownership to a Medicaid Asset Protection Trust may make sense.

Another question is raised when considering applying for Medicaid: is there a primary residence, and is it exempt from being considered a countable asset? Most primary homes are, but this should also be explored with an estate planning attorney.

A Medicaid Asset Protection Trust is an irrevocable trust, but in this case, it’s created with certain features to allow someone to qualify for long-term benefits from Medicaid. A grantor establishes the trust, so the trust itself owns the home (or other assets placed in the trust), and the trustee manages the assets in the trust. The person creating the trust determines the trustee and successor trustees. In most cases, the trust terminates at the grantor’s death, and the trust’s assets are distributed to beneficiaries.

The MAPT is still subject to Medicaid’s five-year look-back. If the vacation home is transferred into the trust and an application is made to Medicaid within five years, the person won’t be eligible.

An elder law attorney can help you plan to protect your assets from the cost of long-term care through Medicaid, insurance, and trusts. Many strategies exist, but they all take some time to create and execute and need to be crafted for your unique situation.

Reference: Daily Local News (Sep. 4, 2024) “Legal East: Legacy planning for your shore house”

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