You’ve most likely dedicated significant time and energy to creating a vision for your business, executing that vision, and even writing up a detailed business plan for the growth of your business. Yet far fewer business owners put the same effort into planning for their company’s continued success following their retirement, incapacity, or death.

However, not planning for the future of your business once you are no longer around to run the company could have disastrous consequences for you, your team, your clients/customers, and your family. And of all the potential risks facing your business, the two that are impossible for you to avoid are your incapacity and death—indeed, no one is immune to old age, illness, or death

Given this liability, creating an estate plan for the continued success of your business should you become incapacitated or when you die is just as critical as any other planning you do for your business, if not more so. The best part is that when you create an estate plan for your business, or a succession plan, it makes your company more resilient, less dependent on you overall, and can greatly improve your ability to take vacations, and have the freedom from your business you probably desire. 

WHAT IS A BUSINESS SUCCESSION PLAN? 

A business succession plan is an estate plan for your business. And that plan will include several strategies, such as life insurance for liquidity, a buy-sell agreement (covering the buyout of partners or other shareholders), and it should also include a trust to spell out the future management of your business. Without a trust in place, your business will likely be stuck in a totally unnecessary court process called probate (described more below), which could interrupt your company’s continued operation and even cause the loss of everything you’ve worked so hard to build.

A WILL ALONE IS NOT ENOUGH

When it comes to creating an estate plan, most people typically think of a will. While it’s possible to leave your company to someone in your will, it’s far from the ideal option. That’s because, upon your death, all assets passed through a will must first go through the court process known as probate. And the cost, time, and complexity involved when the court makes decisions about your business assets is completely unnecessary.

During probate, the court oversees your will’s administration to ensure your assets (including your business) are distributed according to your wishes. But probate can take months, or even years, to complete, and it can be quite expensive, which can seriously disrupt your cash flow and your company’s operation. What’s more, probate is a public process, potentially leaving your business affairs open to your competitors.

Furthermore, a will only goes into effect upon your death, so it would do nothing to protect your business should you become incapacitated by illness or injury before your eventual death. In fact, if you only have a will in place (or have no estate plan at all), in the event of your incapacity, your family would have to petition the court for guardianship in order to manage your business as well as your other personal and financial affairs.

Like probate, the court process associated with guardianship in the event of your incapacity can be long and costly. And in the end, whether it’s a family member or professional guardian agency, there’s no guarantee the individual the court ultimately names as guardian would be the best person to run your company.

TRUSTS PROTECT YOUR BUSINESS & FAMILY

Given the drawbacks associated with a will, a much better way to ensure your business’ continued success is by placing your company in a revocable living trust. A living trust is not required to go through probate, and all assets placed within the trust are immediately transferred to the person, or persons, of your choice in the event of your death or incapacity, without the need for any court intervention.

Upon your death or incapacity, having your business held in trust would allow for the smooth transition of control of your company, without the time, expense, and hassle associated with probate or guardianship. And using a trust, you can choose the individual(s) you think will be best suited to run your company in your absence, whether that absence is permanent (your death) or temporary (your incapacity). And within the trust, you can create a business succession plan, which would not only name your successor, but also provide him or her with detailed—and legally binding—instructions for how you want the business run when you are gone.

Finally, trusts are not open to the public, so your company’s internal affairs would remain private, and the transfer of ownership would take place in your lawyer’s office, not a courtroom, and on your family’s time.

Although the majority of business owners will get suitable protection for their business using a living trust, for the most airtight asset protection, you may want to consider setting up a specialized irrevocable trust. Such irrevocable trusts are quite complex, and they are not the right choice for everyone, so ask us, as your Family Business Lawyer™ to find out if an irrevocable trust would be suitable for your particular company.

A COMPREHENSIVE SUCCESSION PLAN

While placing your business in a trust is an effective way to protect your company upon your death or incapacity, it’s merely one part of a comprehensive business succession plan, which as mentioned earlier typically includes other estate planning strategies, such as business insurance, life insurance, and a buy-sell agreement. For the maximum level of protection, meet with us, your Family Business Lawyer™ to ensure your business has all of the necessary legal protections in place.

Even if you have an existing estate plan, you should have us review it to make sure you’ve covered all of your bases, and your plan has been properly updated. As your Family Business Lawyer™, we use a 50-point assessment to analyze your estate plan, which needs to be consistently updated to account for changes in your life, assets, and the law. 

In our assessment, we will review your business and its assets, and discuss all of the different tools available to ensure the company and wealth you’ve worked so hard to build will survive—and thrive—no matter what happens to you. Taking these actions will not only help shield your company and family from unforeseen tragedy, but it will give you the peace of mind needed to take your business to the next level. Schedule your appointment today to get your plan handled.

This article is a service of Sahmra Stevenson Esq., 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.

2022 ESTATE PLANNING CHECKUP: IS YOUR ESTATE PLAN UP-TO-DATE?

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 estate plan, but also keeping your plan up-to-date. While you almost surely understand the importance of creating an estate plan, 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 estate plan at all, outdated estate plans are one of the most common estate 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 estate plan 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 estate plan.

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 estate plan 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, estate 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 estate plan 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 estate 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 estate 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 estate plan. 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 estate 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 estate 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 estate plan. 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 estate plan 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 estate 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 estate plans, 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 estate 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 Sahmra Stevenson, 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 $450 session at no charge. 

With the cost of a funeral averaging between $7,000 and $12,000 and steadily increasing each year, at the very least your estate plan should include enough money to cover this final expense. And if you are thinking of simply setting aside money in your will to cover your funeral expenses, you should seriously reconsider, as paying for your funeral through your will can create unnecessary burdens for your loved ones.

Although you can leave money in your will to pay for your funeral expenses, your family won’t be able to access those funds until your estate goes through the court process of probate, which can last months or even years. And since most funeral providers require full payment upfront, your family will likely have to cover your funeral costs out of pocket. Moreover, your loved ones will have to deal with all of this while grieving your death.

If you want to avoid burdening your family with such a hefty bill and the stress that comes with it, you need to use estate planning strategies that do not require probate. While you should meet with us, your Personal Family Lawyer® to find the solution best suited for your unique situation, the following 5 options are among the most commonly used methods for covering funeral expenses without the necessity for probate.

01 | TRADITIONAL INSURANCE

You can purchase a new life insurance policy or add extra coverage to your existing policy to cover funeral expenses. Unlike money left in your will, an insurance policy does not go through probate, and it will pay the death benefit to the named beneficiary as soon as your death certificate is filed with the insurance company. 

02 | BURIAL INSURANCE

In addition to traditional insurance, you can also purchase burial insurance, which is specifically designed to cover funeral expenses. Also known as “final expense”, “memorial” and “preneed” insurance, such policies do not require a medical exam. However, you’ll often pay far more in premiums than what the policy actually pays out.

In fact, due to the hefty premiums and the fact such policies are sold mostly to the poor and uneducated, consumer advocate groups like the Consumer Federation of America consider burial insurance a bad idea and even predatory in some cases due to the fact that these policies are often sold to lower income populations.

One final point about using insurance to pay for your funeral: If you have any type of insurance to cover your funeral, it’s crucial that your family knows about it. Far too often, insurance policies are never cashed in because the family didn’t know they existed. Don’t let this happen to you—make sure your family knows about any insurance policies you have as well as how to locate the necessary paperwork.

03 | PREPAID FUNERAL PLANS

Many funeral homes let you pay for your funeral services in advance, either in a single lump sum or through installments. Also known as pre-need plans, the funeral provider typically puts your money in a trust that pays out upon your death, or buys a burial insurance policy, with itself as the beneficiary.

While prepaid plans may seem like a convenient way to cover your funeral expenses, these plans can have serious drawbacks. As mentioned earlier, if the funeral provider buys burial insurance, you’re likely to see massive premiums compared to what the plan actually pays out. And if they use a trust, the plan might not actually cover the full cost of the funeral, leaving your family on the hook for the difference. Plus, most states have inadequate laws protecting funds in such plans, putting your money at risk if the funeral provider closes or is bought out by another company.

In fact, these plans are considered so risky, the Funeral Consumers Alliance (FCA), a nonprofit industry watchdog group, advises against purchasing such plans. The only instance where prepaid plans are a good idea, according to the FCA, is if you are facing a Medicaid spend down before going into a nursing home. This is because prepaid funeral plans funded through irrevocable trusts are not considered a countable asset for Medicaid eligibility purposes.

That said, if you’re looking to buy a prepaid funeral plan in order to qualify for Medicaid, be sure to consult with us first, as not all pre-paid funeral plans are actually Medicaid compliant, even if the funeral home says they are. Moreover, if the irrevocable trust is not set up correctly, it may violate Medicaid’s look-back period, which can delay your eligibility for benefits.

04 | PAYABLE-ON-DEATH ACCOUNTS

Many banks offer payable-on-death (POD) accounts, sometimes called Totten Trusts, that you can set up to fund your funeral expenses. The account’s named beneficiary can only access the money upon your death, but you can deposit or withdraw money at any time.

A POD account does not go through probate, so the beneficiary can access the money once your death certificate is issued. POD accounts are FDIC-insured, but such accounts are treated as countable assets by Medicaid, and the interest is subject to income tax.

Another option is to simply open a joint savings account with the person handling your funeral expenses and give them rights of survivorship. However, this gives the person access to your money while you’re alive too, which puts your money at risk if the person goes into debt or gets sued and their creditors come after your account to pay the other person’s debt.

Given this risk, we recommend you consider other options that will allow you to pay your funeral expenses, without leaving your finances vulnerable to another person’s mistakes or poor money management.

05 | LIVING TRUSTS

When you work with us, as your Personal Family Lawyer®, you don’t need to buy a pre-built trust from a funeral provider. Instead, we can create a customized living trust that allows you to control the funds until your death and name a successor trustee, who is legally bound to use the trust funds to pay for your funeral expenses exactly as the trust terms stipulate.

Furthermore, you can change the terms of your living trust at any time, and you can even dissolve the trust if you need the money for other purposes. Alternatively, if you need an irrevocable trust to help qualify for Medicaid, we can create that type of trust as well, while ensuring the trust stays totally compliant with all of Medicaid’s requirements, so you don’t run afoul of the program’s many complex requirements.

If you are interested in creating a trust to cover your funeral expenses, meet with us, your Personal Family Lawyer® to discuss the options that are best suited for your intended purpose, budget, and family situation.

USE ESTATE PLANNING TO AVOID BURDENING YOUR FAMILY

Although thinking about your eventual death is never easy, with the proper planning, you can make dealing with the aftermath of your death significantly easier for the loved ones you leave behind. To avoid needlessly burdening your family with the expense and stress of planning and paying for your funeral, make sure your estate plan includes the necessary funds to cover this expense, and be sure to use an estate planning strategy that will allow your family to access these funds as quickly and easily as possible—ideally by using an option that avoids probate. 

With so many different options to choose from, consult with us, your Personal Family Lawyer® to find an estate planning vehicle that is best suited for your particular situation. With our guidance and support, we will develop a planning strategy that includes adequate funding to ensure your funeral services are handled in the exact manner you desire—and your family won’t be forced to foot the bill. Contact us today to learn more.

This article is a service of Sahmra A Stevenson, 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 $450 session at no charge. 

Actress Anne Heche died this August following a tragic car accident in which she plowed her vehicle into a West Los Angeles home, where it burst into flames. After being pulled from the wreckage, the Emmy Award-winning actress was hospitalized in critical condition, suffering from severe burns and smoke inhalation.

The fiery accident left Heche brain dead and comatose, but she was kept on life support for seven days in order to identify a suitable recipient for her organs, which was in line with the actress’ wishes, according to a statement from her publicist. After a successful match with organ donors, Heche was removed from life support on August 14th, and she died shortly thereafter. She was 53 years old. https://pagesix.com/2022/08/12/anne-heche-not-expected-to-survive-car-crash/?_ga=2.199837805.272709222.1663801684-802000813.1662580652]

Heche is survived by two young sons. Her eldest, Homer Heche Laffoon, is 20 years old, and is from her marriage with ex-husband Coleman Laffoon. Her youngest son, Atlas Heche Tupper, is 13, and his father is Canadian actor James Tupper, with whom Heche had a 10-year relationship following her divorce from Laffoon. Heche is also survived by her mother, Nancy Heche.

According to a court petition filed by her eldest son Homer on August 31st, Heche died without a will, and Homer requested that he be named executor of his late mother’s estate. However, on September 15th, Heche’s ex-boyfriend James Tupper filed a probate petition objecting to Homer’s bid, claiming that Heche e-mailed him a copy of her will in 2011, leaving him (Tupper) in charge of her estate.  https://pagesix.com/2022/09/01/anne-heche-died-without-will-son-homer-seeks-control-of-estate/]

In a report by Rolling Stone, Tupper says Heche nominated him to handle her affairs, allegedly stating in her e-mail, “My wishes are that all of my assets go to the control of Mr. James Tupper to be used to raise my children and then given to the children. https://www.rollingstone.com/tv-movies/tv-movie-news/anne-heche-estate-war-1234594195/]

Tupper requested that the court honor Heche’s final wishes and deny Homer’s petition, which he alleges incorrectly claimed she died intestate, the legal term for when someone dies without a will. In Tupper’s petition, he questioned both Homer’s ability to carry out the executor role and his motives, noting that “Homer is only 20 years of age and is unemployed, and was estranged from [Heche] at the time of her death.” 

While we can’t know for certain whether or not Anne Heche had a will or if the will Tupper describes is valid, given that there is so much confusion surrounding her will, the late actress most likely didn’t have any trusts set up either. Her failure to plan is likely to create a number of major problems for her two sons and other surviving loved ones.

With this in mind, in this series of articles we’ll discuss Heche’s estate planning mistakes and how those errors will likely impact her family and assets. From there, we’ll outline what you can learn from this tragic situation and the steps you can take to make certain that your loved ones never need to endure a similar situation.

PROBATE: A NEEDLESS ORDEAL & EXPENSE

If you die without a will, or with uncertainty around your will, as Heche did—and even if your estate plan includes a will alone—you are guaranteeing your family will have to deal with the court process of probate upon your death or incapacity. Like all court proceedings, probate can be long, costly, and traumatic for your surviving loved ones. 

Until Heche’s estate completes the probate process, her assets will be mostly inaccessible to her heirs. As a result, her sons, Homer and Atlas, could be left without any financial support from their late mother for quite a significant amount of time. 

It will likely take many months just to locate all of Heche’s assets, and it’s likely some of those assets will get overlooked—and some may never be found. All told, there is approximately $58 billion in unclaimed property across the United States, and this is exactly how a great deal of it ends up lost. 

To ensure all of her assets are located and accounted for, Heche could have had a relationship with a lawyer who, ideally, would have created (and maintained) an inventory of her assets. Such an inventory not only makes creating your estate plan much easier, but most importantly, it allows your loved ones to know what you have, where it is, and how to access it if something happens to you.

As your Personal Family Lawyer®, we will not only help you create a comprehensive asset inventory, we’ll make sure it stays regularly updated throughout your lifetime. To help you get this process started, we’ve created a free tool called a Personal Resource Map, where you can start creating your inventory right now.

To get started, visit the Personal Family Lawyer® website to watch a webinar by Ali Katz, founder of Personal Family Lawyer®, and get your asset inventory started for free. That way, no matter what, if something happens to you, your family will know what you have, where it is, and how to find it.

From there, schedule a meeting with us, your Personal Family Lawyer® to review what you have, and what will happen to what you have, if and when something happens to you, so you can choose an estate planning structure that keeps your family out of court and conflict. 

A LONG, EXPENSIVE, & PUBLIC PROCESS

What we know so far is that Heche didn’t seem to have a lawyer who created an inventory of her assets, or to make sure her surviving family would stay out of court, or even out of conflict. As a result, her estate is likely to be stuck in probate for at least a year or more. And that assumes everything goes smoothly and there are no serious conflicts or disputes among Heche’s potential heirs or creditors, which is common following celebrity death—and as we are already seeing between Homer and Tupper.

In fact, with his surviving heirs and creditors fighting over the rights to his vast fortune, it took more than six years for Prince’s estate to be settled. https://www.rollingstone.com/music/music-news/prince-estate-value-1285413]

The unnecessarily lengthy time frame is just one of the drawbacks to probate—the unnecessary expense of a probate is a whole other issue. Before Homer and Atlas can inherit a dime, a veritable army of other people and entities—attorneys, a personal representative, accountants, various advisors, creditors, and possibly, the IRS—must all be paid, and this is likely to seriously deplete Heche’s estate. 

Probate costs in California average 5% of the total value of the estate, leaving an estimated cost to her family of approximately $200,000 or more. Most of these fees could have been avoided with a properly established estate plan—and with a lawyer to guide her and her family throughout her life and beyond.  

Last, and perhaps worst, probate is open to the public, so all of Heche’s dirty laundry will be fodder for the tabloids, as it already has been for so much of her life. Given the actress’ past history with mental illness and her contentious relationships with her mother, ex-husband, and Ellen DeGeneres, the tabloids are likely to dig up plenty of dirt.

Fortunately, there’s a simple solution to ensuring your surviving loved ones will avoid the cost, time delay, and public nature of probate upon your eventual death or potential incapacity, and this solution is available not only to rich celebrities, but to regular folks, as well.  

With a well-counseled and drafted estate plan, likely including a living trust in addition to a will (and a trusted advisor to support it all), Homer and Atlas would have been able to access their late mother’s assets without the need for any court intervention whatsoever, if that’s what Heche would have wanted. 

Alternatively, Heche could have made it clear that she wanted Tupper controlling her affairs, and her lawyer could have confirmed that without dispute. Finally, as long as a trust is properly created and maintained, it will remain private, and the transfer of assets to your heirs can happen within the privacy of our office, not a courtroom, and on your family’s time. 

This would have prevented the tabloids and other potential bad actors from getting access to the details of Heche’s assets, her beneficiaries, and family conflicts, all of which will now be readily available for public consumption. 

Don’t let your loved one’s be left with a mess like Anne Heche’s family is dealing with now. Using our Life & Legacy Planning process, we’ll work with you to put in place the right combination of estate planning solutions to fit with your asset profile, family dynamics, budget, as well as your overall goals and desires.

Next week, in part two of this series, we’ll discuss the type of trust Heche could have used to pass on her assets to her two young sons.  [PFL/FBL: INSERT HYPERLINK TO NEXT ARTICLE IN YOUR BLOG WHEN READY]

PLANNING FOR INCAPACITY & END-OF-LIFE CARE

Furthermore, Heche’s untimely death is a vivid reminder that estate planning isn’t just about planning for the distribution of one’s assets after death, but also planning for incapacity and end-of-life care. With this in mind, in part two, we’ll also address the estate planning tools the late actress should have had in place to deal with the time period following her terrible accident when she was in a coma.

Until then, if you need to create your estate plan, or you need to review an existing plan, reach out to us, your Personal Family Lawyer® to schedule your visit. With our guidance and support, we can help keep your family out of court and conflict, and ensure your loved ones won’t have to endure the same tragic consequences as Heche’s.

This article is a service of , Sahmra A Stevenson Esq. , 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 $450 session at no charge. 

Setting up the right legal structure for your business may seem like a boring detail that you don’t need to spend much time on. But, in reality, selecting the right entity for your company is one of the most critical decisions you can make as a business owner.

That said, there are all sorts of myths surrounding business entities, and this can cause confusion and lead to costly mistakes. To this end, here are 4 of the most popular myths about business entities and how you can avoid falling for them.

Myth #1: Small businesses don’t need a business entity.

Although it’s possible to run a business without a business entity, doing so puts you—and everything you own—at risk. Without the proper entity set up, there’s no separation between your business and personal assets, so your personal assets would be at risk in the event your business goes into serious debt or gets hit with a lawsuit.

For example, if your company is structured as a sole proprietorship or general partnership and you go out of business, your business creditors would come after your personal assets to pay off your business debts. The same is true if your business is ever sued.

By structuring your business as a limited liability company (LLC) or a corporation, however, you can shield your personal assets from liabilities incurred by your business. When properly set up and maintained, such structures establish your company as a separate legal entity distinct from you as an individual, preventing you from being held personally liable for the company’s debts or legal disputes.

Meet with us, your Family Business Lawyer™ for help selecting, setting up, and maintaining the entity structure that’s best suited for your particular company, no matter how big or small it may be.

Myth #2: There’s no need to set up an entity for your business until it’s profitable.

It may seem like a good idea to delay setting up your business entity until you are actually earning revenue, or even making a profit, but in reality, you should have your entity in place from the very start. This is true not only because liability can arise well before you are profitable, but also because incorporating your business is likely to lead to even more income and profit.

For example, having the proper entity in place in the early stages allows you to receive credit in your business’ name, and raise money from investors. Not to mention, the act of incorporating itself shows that you take your company seriously, which can inspire increased interest from customers, vendors, and financial backers.

Myth #3: A corporate entity offers absolute liability protection.

When properly created and maintained, entities like an LLC or corporation can shield your personal assets from creditors, lawsuits, and other liabilities incurred by your business. However, the protection afforded by these entities is not absolute.

In fact, there are a number of circumstances in which a creditor can come after your personal assets to settle a claim against your business. When this happens, it’s known as “piercing the corporate veil.”

While the corporate veil can be pierced if you commit fraud or negligence, in most cases, it happens due to innocent mistakes. These errors can include inadvertently mixing your personal and business finances, personally signing off on a business loan, or failing to abide by administrative formalities.

As your Family Business Lawyer™, we will support you with maintaining your business records and keeping up with the required corporate formalities. In fact, we offer special maintenance packages that make meeting these requirements a snap, while maintaining the maximum level of protection for your personal assets.

Finally, while a corporate entity can protect your personal assets from liability, these legal structures do not offer any protection for your business assets. To safeguard your business assets, you’ll need to invest in the proper business insurance, which is always your first line of defense.

Myth #4: Incorporating in Delaware or Nevada is always best.

You may have been told—perhaps even by another lawyer—that establishing your corporate entity in Delaware or Nevada is your best bet for tax purposes. But for most businesses, incorporating in these states is completely unnecessary—and it may even cost your company in the long run.

Although many companies do incorporate in these states, it’s for very specific reasons, such as to raise investment capital or take advantage of favorable securities laws to go public. However, unless you are actually doing business in these two states, your company isn’t going to receive any significant tax benefits or additional asset protection by incorporating there.

While Nevada and Delaware do not have state personal- or corporate-income taxes, that doesn’t mean your business will avoid state-level taxes entirely. The fact is, if you are a resident of, or doing business in, a state that has state income taxes, you must still pay those taxes, even if you are incorporated elsewhere.

Plus, if you incorporate outside of the state where you live or conduct business, you must file as a foreign registrant in your home state. Such double filings can result in extra filing fees and administrative expenses that make out-of-state incorporation financially unfeasible.

However, there are instances where it might make sense to set up your business entity in states like Delaware or Nevada, or even Wyoming or South Dakota. Contact us, your Family Business Lawyer™ for advice on the best location for establishing your entity and for support in navigating the requirements for maintaining the entity in each state you do business in.

We Can Help
Setting up the right entity for your business isn’t something you should take lightly or try to do all on your own—there’s far too much at stake. As your Family Business Lawyer™ we will offer you trusted advice on the legal entity that’s most advantageous for your business. while also ensuring that your entity is properly set up, with all of the necessary agreements and other resources in place.

Additionally, we can provide you with a variety of business systems, which will not only make your operation more efficient, but also establish a clear separation between your business and personal finances, which is a vital part of maintaining your entity’s liability protection. Finally, as your Family Business Lawyer™ we will also make sure that you are in full compliance with the various state laws and administrative formalities required to maintain your entity and safeguard your personal assets. Contact us today to learn more.

This article is a service of Sahmra Stevenson, Esq. 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.

As you grow your company, you may discover that it’s time to move beyond leveraging your personal credit to fund your business, whether through business or personal credit cards, and look for outside investors or lenders.

When it comes to securing funding for your business, you must first decide what form of investment is right for your company: equity or debt. More specifically, are you looking for an investment in exchange for an equity stake in your company, or would you be better off getting a loan to fund your business?

EQUITY INVESTMENT: SELLING SHARES IN YOUR BUSINESS

Equity investors provide capital, either in the form of cash (preferable) or in kind with services, in exchange for a percentage of your company’s profits. Generally speaking, equity investment is only feasible when you have a clear plan for exiting your business, so your equity holders will be able to earn a return on their investment when your equity becomes saleable. If you are not yet at the place where you have a clear strategy for exiting your business, you (and your investors) will likely be better off securing a loan to fund your business.

If you are at the early stages of your business and not yet clear on its value, you may want to structure that investment in the form of what’s called a SAFE investment. SAFE stands for “Simple Agreement for Future Equity.” Basically, a SAFE is an agreement between an investor and your company that provides rights to the investor for future equity in your company.

In exchange for the money invested through the SAFE, the investor receives the right to purchase stock in a future equity round (when one occurs), subject to certain conditions set in advance in the SAFE. SAFEs were created to be a simple replacement for convertible notes, and they are designed for startups seeking initial funding.

A SAFE makes sense when your company is likely to raise money in the future through an established valuation, but your company is in too early of a stage to be valued appropriately. For more information on SAFE investments, check out this video from the seed-money startup accelerator Y Combinator.

You definitely want to bring on a trusted legal advisor like us if you decide to fund your company with complex investment structures, such as a SAFE, or if you are going to raise capital by selling equity in your company. With our support and guidance, we can ensure that you have the proper legal and financial systems in place to secure your investment.

DEBT INVESTMENT: BUSINESS LOANS

Oftentimes, the best place to start looking for outside investment in your company is by reaching out to your friends and family for a loan. Before you take on a loan from a friend or family member, be sure to document the loan with a promissory note.

A promissory note is basically a legal agreement that you are promising to pay back the money you borrowed under certain terms. The promissory note should have clear terms regarding how you will repay the loan and the specific terms under which you will repay, such as the interest rate you are paying on the loan and over what time period the loan will be repaid.

If you don’t have any friends or family who are interested in investing in your business, you may choose to fund your company with a loan from a bank. The best way to do this is to have a relationship with a local banker, who can get to know you and your business. From there, the banker can help you tap into different small-business financing options, generally through loans from the SBA, or Small Business Administration.

It’s never too early in your business lifecycle to establish a relationship with a business banker. Ideally, contact the local business banks in your community, and go meet one or more of the bankers at each of the banks to find a relationship that feels most supportive to you and your business.

When you receive funding from a business bank, make sure the loan is provided to your business, and not to you personally, whenever possible. And it’s most ideal if you can avoid a personal guarantee of the loan, though not always possible. A personal guarantee means that if your business fails, you will be held personally liable for the balance of the loan, and the bank can come after your personal assets to satisfy the terms of the loan.

Once your business has established income, you may be able to qualify for a loan for your business without a personal guarantee. Yet, in the early stages of your business, this likely won’t be possible. However, you should always ask to get your business loan without a personal guarantee required—the worst case scenario is the banker says no.

GAIN CONFIDENCE AND CLARITY WITH LIFT SYSTEMS

Building relationships with investors and lenders can be a great way to fund the future growth of your business. That said, developing such relationships will require you to confront any remaining insecurities or fears you may have about whether or not you are personally worth investing in.

On that note, having solid legal, insurance, financial, and tax (LIFT) systems in place will make you far more confident going into these relationships. If you’ve yet to put LIFT systems in place, contact us, as your Family Business Lawyer™, to 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 foundation that need the most attention. From there, you can meet with us to conduct a more thorough audit of your business, so you can eventually implement the full LIFT Foundation System & Toolkit into your operations.

With a solid LIFT foundation for your company in place, you can finally gain genuine confidence about your business’ long-term success. Armed with that clarity, you can devote all of your energy and passion into growing your business into something truly meaningful for yourself, your clients, and your family.

This article is a service of Sahmra A Stevenson, 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.

Given that intellectual property (IP) can make up a significant portion—sometimes up to 90%—of the total value of today’s companies, it’s essential that you do everything you can to protect these intangible assets. And one of the first IP elements you’ll want to protect are your company’s brand name and logo.

To safeguard these brand assets, you’ll need to secure trademarks. A trademark can protect words, slogans, symbols, and other distinguishing features of your brand by allowing you to prohibit other businesses from using the same—or highly similar—branding as yours.

Yet not all trademarks offer equal protection. For example, you can gain what’s known as “common-law” trademark rights for free simply by being the first business to use your particular brand name in commerce. However, as you’ll see below, common law trademark rights are extremely limited and will prove highly inadequate for most companies.

For maximum protection, you should register your trademark with the U.S. Patent and Trademark Office (USPTO). Although registering with the USPTO typically costs around $300 per mark, doing so provides you with numerous advantages compared with common law marks. Some of the leading advantages of registering your trademark include:

01 | NOTICE OF OWNERSHIP

Registration of your trademark provides your company with official documentation and public notice that you are the valid owner of the mark and have the exclusive right to use it across the entire U.S. This is in contrast to a common law trademark, which requires a company to actually use the mark in business to gain ownership, and that ownership is limited to the local area where the business is located.

02 | PREVENTS OTHERS FROM USING A SIMILAR TRADEMARK

Once your trademark is registered, it’s listed in the USPTO’s database, and no one else can register a confusingly similar mark in connection with similar goods and services. To this end, the federal government is essentially assisting you enforce your rights and preventing infringement before it can start, without any additional action needed on your part.

03 | PROTECTS YOU FROM INFRINGEMENT

Because the USPTO will not allow you to register a similar trademark to any others that are registered, this also prevents you from accidentally infringing on another company’s mark. This can not only save you from a financially ruinous lawsuit down the road, but also prevent you from having to completely reinvent your brand from scratch if your mark is too similar to one that’s already registered.

04 | GIVES YOU THE RIGHT TO SUE IN FEDERAL COURT

Having a registered trademark gives you the right to sue for infringement in federal court, where you will receive the presumption of being the valid owner of the mark. The presumption of ownership shifts the burden of proof to the defendant who might try to claim they have common law trademark rights as a defense. Under this burden, the defendant must prove that he/she was first to use the mark and their use has been continuous, which can be extremely difficult, requiring extensive documentation, and/or witnesses.

05 | OFFERS ADDITIONAL LEGAL REMEDIES

Registering your trademark can increase the number of remedies available to you if you sue for infringement. Depending on the circumstances, you can go after the defendant’s profits, seek statutory and punitive damages, as well as collect attorney’s fees and court costs. Such remedies typically aren’t available with only common law rights.

06 | ALLOWS YOU TO PUBLICLY DISPLAY YOUR REGISTRATION

Registration grants you the right to use the ® symbol with your trademark branding. Unregistered marks are only allowed to use the ™ symbol. This designation gives your company more credibility and prestige, while letting competitors know you’re serious about protecting for IP.

07 | ENABLES YOU TO APPLY FOR TRADEMARK REGISTRATION IN FOREIGN MARKETS

While federal trademark registration is usually not enforceable outside of US borders, registering does provide you with a basis for applying for trademarks in many other countries. Having trademarks in other countries can be especially important, with the rapid globalization of the marketplace and widespread use of the internet.

08 | EMPOWERS ENFORCEMENT OF TRADEMARK BY U.S. CUSTOMS OFFICIALS

Federal registration allows you to record your trademark with U.S. Customs and Border Protection. This empowers Customs officials to block the importation of infringing or counterfeit goods and allows you to bring a counterfeiting case to federal court.

ENFORCING YOUR RIGHTS

It’s important to keep in mind that outside of prohibiting others from registering a confusingly similar trademark, the USPTO will not enforce your trademark rights or bring any legal action against an infringer—that’s up to you. That said, if you discover potential infringement, we can help you enforce your ownership rights, and do everything we can to maintain your trademark rights without a lawsuit. Indeed, we often write letters that not only resolve the conflict, but also inspire the other party to join you in an ongoing joint venture that can benefit both parties.

While federally registering a trademark is a fairly simple process—and one you could do on your own—it’s typically a good idea to just let us handle it for you, so you can stay focused on the business of your business, while we handle the underlying structures that support you to grow your business. As your Family Business Lawyer®, we can not only help you secure the proper trademarks, but we can also work with you to develop a comprehensive strategy to protect all of your other intellectual property, as well as support the ongoing strategy of building a great business and a great brand.

This article is a service of Sahmra A Stevenson 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.

Using independent contractors (ICs) can give your company an edge in today’s thriving gig economy, but if you are not careful, contractors can also be a serious liability. In fact, working with ICs comes with a number of unique legal and financial risks that can be potentially ruinous to your business if not handled properly.

Beyond getting sued or hit with hefty fines for misclassifying an employee as a contractor, you must also be careful to properly secure ownership of anything an IC creates for you. This is particularly true when it comes to your intellectual property (IP).

And whether you know it or not, IP is one of your company’s most valuable assets. Indeed, a recent study found that up to 80% of the value of today’s typical business is made up of different forms of IP.

Do You Actually Own The Work You Are Paying For?

Unlike employees, with whom you generally own automatic copyrights to everything they produce while working for you, ICs typically retain full copyrights to their work—unless they’ve signed a written agreement stating otherwise. Indeed, if you don’t have properly drafted agreements in place, you may not even own the work you pay ICs to produce for you. 

Fortunately, it’s fairly easy to secure full ownership of these works by using the proper legal agreements. However, this is only possible if you actually put these agreements in place with every IC you work with—and yes, this means every single person, even those you have worked with for years without a single problem.

Work-For-Hire Agreements

When it comes to using legal agreements to secure ownership of the work you hire an IC to produce, you have a couple of options. One option is to include a work-for-hire clause in their independent contractor agreement.

A work-for-hire clause states that you, not the IC, own all copyrights to the deliverables he or she produces for you under the agreement. Such a clause effectively makes it as if you created the work yourself, and as such, it allows you to use the work in any way you wish.

Just be sure to have the IC sign the agreement before he or she starts working. If not, it may be too late to acquire full ownership. Additionally, work-for-hire clauses only cover certain types of materials. According to the U.S Copyright Office, in order for a work-for-hire to apply, the work being created must fall into one of the following nine categories:

1. a contribution to a collective work, such as a magazine or anthology
2. a part of an audiovisual work or movie
3. a translation
4. a supplementary work, such as a forward, editorial notes, appendix, bibliography, or chart
5. a compilation created by selecting and/or arranging preexisting works
6. an instructional text
7. a test
8. answer materials for a test
9. an atlas

If the work you hire an IC to create does not fall into one of these categories, a work-for-hire clause would not give you full ownership. This catches many business owners by surprise, who falsely assume having such a clause is all they need. However, if the work you are paying for doesn’t fit into these categories, you will need a different type of agreement to secure ownership of the IP—and as you can see, the type of work covered by work-for-hire agreements is fairly limited.

Copyright Assignment

For works that fall outside of the work-for-hire domain, you will need to include an assignment clause in the contractor’s agreement, in which the IC transfers some, or all, of their copyrights to your business. Without this clause, the IC would retain all rights to the work, even if the agreement contained a work-for-hire clause.

Adding an assignment clause to the IC’s agreement is fairly simple, and for maximum protection, you can even include such a clause alongside a work-for-hire provision. It’s as easy as simply adding a brief clause in the agreement stipulating that if the work is not deemed a work-for-hire, the IC assigns all copyrights to your company.

Non-Disclosure & Non-Disparagement Agreements

In addition to work-for-hire clauses and copyright assignment agreements, all of your agreements with contractors should also include non-disclosure and non-disparagement agreements, which would keep an IC from disclosing details about their work with you to outside parties, especially your competitors. A non-disclosure agreement could cover trade secrets, confidential business information, and financial information about your business, and even whether the IC worked with you.

Although you may not think of it this way, one of your most valuable items of intellectual property is your reputation. A non-disparagement agreement assures you that an IC is unlikely to tarnish your reputation after working with you.

Don’t Go It Alone

Although work-for-hire, copyright-assignment, non-disclosure, and non-disparagement clauses and agreements are not difficult to create, because each project is unique, there is not a specific template or generic form that would cover every job. What’s more, the wording of each agreement is also important, and some states require specific language for work-for-hire agreements to be legally valid.

Given this, you should steer clear of generic legal agreements you find online, and always have us, your Family Business Lawyer™ review your IC agreements, even if they were drafted by another lawyer. Whether you need your existing agreements reviewed or need help creating new contracts, as your Family Business Lawyer™, we will support you in developing the proper legal agreements that will give you the most comprehensive ownership rights possible with every contractor you hire. 

Furthermore, we can perform an IP audit for your company. This 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. An IP audit will not only identify your IP assets, it can also help ensure you have all of the necessary IP protections, such as trademarks, copyrights, along with the proper legal agreements governing those projections to ensure you own the full spectrum of rights related to your IP. Contact us, your local Family Business Lawyer™ firm today to get started.

This article is a service of Sahmra Stevenson, 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. 

These days, more and more young people are delaying—if not totally foregoing—a life that involves marriage and parenting. The lack of jobs, crushing student debt, multiple recessions, and the pandemic have pushed many young people into a life path that leaves little room for settling down with a partner and getting married—and even less room for having children.

Yet, for other young adults, staying single and childless is simply a matter of choice. Regardless of the reason, as more young adults opt for non-traditional lifestyles, the number of single childless households is likely to steadily increase in the coming years.

While most adults don’t take estate planning as seriously as they should, if you are single with no children, you might think that there’s really no need for you to worry about creating an estate plan. But this is a huge mistake. In fact, it can be even MORE important to have an estate plan if you are single and childless.

If you are single without kids, you face several potential estate planning complications that aren’t an issue for those who are married with children. And this is true whether you’re wealthy or have very limited assets. Indeed, without proper estate planning, you’re not only jeopardizing your wealth and assets, but you’re putting your life at risk, too. And that’s not even mentioning the potential conflict, mess, and expense you’re leaving for your surviving family and friends to deal with when something unexpected happens to you. 

With this in mind, if you’re single and childless, consider these three inconvenient truths before you decide to forego estate planning.

1. Someone Will Have to Handle Your Stuff

Whether you’re rich, poor, or somewhere in between, in the event of your death, everything you own will need to be located, managed, and passed on to someone, which can be a massive undertaking in itself—one that few families are properly prepared for. 

In fact, following a loved one’s death, American families spend an average of 500 hours and $12,700 over the course of 13 months (20 month if probate is required) to finalize the person’s affairs and settle their estate, according to the first annual Cost Of Dying report released this March by tech startup Empathy in partnership with Goldman Sachs. Look for additional articles in the coming weeks covering the Cost Of Dying and the new role Empathy is playing in the end-of-life industry.

On top of the logistical complications involved with finalizing your affairs, without a clear estate plan, including a will or trust, your assets will go through the court process of probate, where a judge and state law will decide who gets everything you own. In the event no family steps forward, your assets will become property of the state.

Why give the state everything you worked to build? And even if you have little financial wealth, you undoubtedly own a few sentimental items, maybe even including pets, that you’d like to pass to a close friend or favorite charity.

However, it’s rare for someone to die without any family members stepping forward. It’s far more likely that some relative you haven’t spoken with in years will come out of the woodwork to stake a claim. Without a will or trust, state intestacy laws establish which family member has the priority inheritance. If you’re unmarried with no children, this hierarchy typically puts parents first, then siblings, then more distant relatives like nieces, nephews, uncles, aunts, and cousins.

Depending on your family, this could have a potentially troubling—and even deadly—outcome. For instance, what if your closest living relative is your estranged brother with serious addiction issues? Or what if your assets are passed on to a niece with poor money-management skills, who is likely to squander her inheritance?

And if your estate does contain significant wealth and assets, this could lead to a costly and contentious court battle, with all of your relatives hiring expensive lawyers to fight over your estate. In the end, this could tear your family apart, while making their lawyers rich—all because you didn’t think you needed an estate plan.

As your Personal Family Lawyer®, we will work with you to create an estate plan that ensures that your assets will pass to the proper people, while avoiding both unnecessary court proceedings and family conflict.

2. Someone Will Have Power Over Your Healthcare

Estate planning isn’t just about passing on your assets when you die. In fact, some of the most critical aspects of estate planning have nothing to do with your money at all, but are aimed at protecting you while you’re still very much alive.

Proactive planning allows you to name the person you want to make healthcare decisions for you in the event you are incapacitated and unable to make such decisions yourself. This is done using an estate planning tool known as a medical power of attorney.

For example, if you’re incapacitated due to a serious accident or illness and unable to give doctors permission to perform a potentially risky medical treatment, it would be left up to a judge to decide who gets to make that decision on your behalf.

If you have a romantic partner but aren’t married and haven’t granted him or her medical power of attorney, the court will likely have a family member, not your partner, make those decisions. Depending on your family, that person may make decisions contrary to what you or your partner would want.

And if you don’t want your estranged brother to inherit your assets, you probably don’t want him to have the power to make life-and-death decisions about your medical care, either. But that’s exactly what could happen if you don’t put a plan in place.

Furthermore, your family members who have priority to make decisions for you could keep your dearest friends away from your bedside in the event of your hospitalization. Or family members who don’t share your values about the type of food you eat, or the types of medical care you receive, could be the one’s making decisions about how you’ll be cared for.

To address these issues, you need to implement an estate planning tool that provides specific guidelines detailing exactly how you want your medical care to be managed during your incapacity, including critical end-of-life decisions. This is done using an estate planning vehicle known as a living will.

Bottom line: If you are single with no kids, you need to create an estate plan in order to name healthcare decisions-makers for yourself and provide instructions on how you want those decisions made should you ever become incapacitated and unable to make those decisions yourself.

3. Someone Will Get Power Over Your Finances

As with healthcare decisions, if you become incapacitated and haven’t legally named someone to handle your finances while you’re unable to do so, the court will pick someone for you. The way to avoid this is by granting someone you trust durable financial power of attorney.

A durable financial power of attorney is an estate planning vehicle that gives the person you choose the immediate authority to manage your financial, legal, and business affairs if you’re incapacitated. This agent will have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting your Social Security benefits, selling your home, as well as managing your banking and investment accounts.

Without a signed durable financial power of attorney, your family and friends will have to go to court to get access to your finances, which not only takes time, but it could lead to the mismanagement—and even the loss—of your assets should the court grant this authority to the wrong person.

What’s more, the person you name doesn’t have to be a lawyer or financial professional; it can be anybody you choose, including both family and friends. The most important aspect of your choice is selecting someone who’s imminently trustworthy, since they will have nearly complete control over your finances while you remain incapacitated. And besides, with us as your Personal Family Lawyer®, your agent will have access to our team as their trusted counsel should they need guidance or help.

Don’t Leave So Much At Risk
Given these potential risks and costs for yourself and  those you care about, it would be foolhardy if you are single without kids to ignore or put off these basic estate planning strategies. Identifying the right estate planning tools is easy to do, and it begins with a Family Wealth Planning Session. During this session, us,  your local Personal Family Lawyer® will consider everything you own and everyone you love, and guide you to make informed, educated, and empowered choices for yourself and your loved ones.

In the end, it will likely take just a few hours of your time to make certain that your assets, healthcare, and finances will be managed in the most effective and affordable manner possible in the event of your death or incapacity. Don’t leave your life and assets at risk or leave a mess for the people you love; contact us, your Personal Family Lawyer® to get your estate planning handled today.

This article is a service of Sahmra A Stevenson, 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 $450 session at no charge.

When creating an estate plan, 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 estate planning documents. 

However, it’s critical that you don’t overlook this type of property in your estate plan, 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 estate plan, it can lead to long-lasting disagreements that can tear your family apart.

Heirlooms & Keepsakes: Little Things With Big Value

Heirlooms and keepsakes are both prized for their sentimental value, but these possessions are slightly different from one another in terms of the manner in which the items are passed on. 

Heirlooms: Heirlooms are passed down among family members for generations, and the passing of heirlooms sometimes involves traditions. For example, the first daughter to marry inherits grandmother’s heirloom wedding ring.

Keepsakes: Keepsakes, on the other hand, are possessions that are given or kept specifically for sentimental or nostalgic reasons, and these items may only get passed on once. For example, photo albums are a typical keepsake that are treasured by many families. If a keepsake gets passed on multiple times, it may eventually become a family heirloom.

Although just about any personal possession could be considered an heirloom or keepsake, some of the most common examples of these items include the following:

• Jewelry
• Photographs
• Books
• Art
• Musical instruments
• Furniture
• Clothing
• Bibles
• Recipes
• Family documents (such as birth certificates, baptism records, and citizenship papers)
• Collections (such as sports memorabilia, coins, stamps, and doll collections)

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 estate plan in one way or another. 

Strategies For Peacefully Distributing Heirlooms & Keepsakes
While there is no one perfect way to distribute these items in your estate plan, 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 estate 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 estate plan 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 estate plan 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 estate plan 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 estate 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 estate plan 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 Sahmra Stevenson, 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 $450 session at no charge.