Estate Planning for Same-Sex Married Couples

Estate planning is always a complicated and important issue, and in the case of same-sex married couples there may be additional issues that require extra planning. For same-sex unmarried couples, there are even more issues.

While the law obviously allows same-sex couples to marry in all states in the country, there remain some counties across the country where same-sex couples cannot marry.

It is recommended that same-sex married couples take the same steps in estate planning as other married couples in order to protect themselves.

The first step is to make sure you have a legal marriage license if you are married. Prior to the 2015 Supreme Court decision legalizing same-sex marriage, some couples married under existing state laws. If they later moved to a state that did not recognize that marriage, there could be legal consequences.

Once that’s done, the other legal steps in estate planning obviously start with a will. But as is the case in any marital relationship, a will is just the first of several legal steps and documents that you should consider.

I also strongly recommend the following: a living will, designation of health care surrogate, durable power of attorney and a declaration of pre-need guardian.

The importance of these documents cannot be understated especially if you have children in the family, and if there are other family members who are not happy with your same-sex relationship.

If you have any uncertainty or questions, or do not have all these documents prepared, I will be glad to help.

Planning a Business Succession

We recently wrote here about how to transfer small business ownership to your heirs. But what happens when there are no logical family members to take over your business when you retire?

You have options but as is the case in any other business planning, you need to start acting sooner rather than later. In many cases, small businesses simply fail if there is no plan in place when the owner is ready to step down. That doesn’t even consider what kind of plans may be in place if the owner dies or becomes incapacitated suddenly.

So the idea is to plan early, or before there is a crisis, and then be prepared to update that plan as conditions change.

The first step is obvious. Is there someone in your business who is the logical person to succeed you when you retire or become unable to continue to run the company? Take a hard look at your employees to determine if the person is there waiting to assume the leadership role. Ideally this should happen at least a decade before you plan to retire.

Next you need to develop a formal training program. If you don’t have a business plan, you probably need one before you can develop a training program. If you do have one but it has been sitting on a shelf too long, you may need to revise it.

Use the business plan to identify the most important aspects of your business. Your potential successor should become familiar with all of these critical functions. This person needs to learn over time all the details of your operation, not just the executive duties.

You need to set a timetable to determine how and when leadership of the company should change. Start to have your successor take control of various aspects of the business. Let them learn from mistakes and try not to contradict his or her decisions.

Then you need to start to plan your retirement, including when it will start. And this is a plan you should stick to. People often plan retirement but when it gets closer, they put it off.

Finally, when you retire, hand the company off to your successor.

All that sounds simple enough but there are implications along the way – many of them dealing with financial planning. It’s important to acquire the assistance of an attorney skilled in the practice areas of estate planning and business law. Those are both practice areas with which we have great familiarity and can help.

Transferring a Family Business

If you have owned your own small business for years and have seen it grow to be a successful endeavor, you may be facing a dilemma if you are reaching an age when you want to slow down or retire.

There are a number of options as to the next step for your business, and there are a lot of considerations.

Many people grow businesses with the ultimate plan of turning it over to their children. But turning to a son or daughter and saying, “This is now yours” is a little more complicated than that. That’s assuming the son or daughter wants the business. And if there are multiple children – and all are interested – it’s even more complex.

If there are multiple children interested in ownership of the business, the first step is to determine how the business will be structured. A sole proprietorship for example may have to become some sort of business entity such as a corporation or a limited liability company.

Once that’s done, it’s important to follow a very specific process with a few ultimate goals in mind.

Whether you sell the business or gift it to children, you must pay careful attention to any related tax issues.

Under IRS rules, you can set up a gifting program to transfer ownership in a way that reduces gift taxes. This method could take several years and requires careful planning.

If you choose to sell the business outright to a family member, there are ways to avoid or reduce gift or estate taxes.

There are other methods as well, including a buy-sell arrangement, a grantor retained annuity trust (GRAT), a grantor retained unitrust (GRUT), private annuities, family limited partnerships and more.

The best advice I can give you, if you believe this is a path you want to pursue with your family is to start planning early. I can help with this complex process.

Digital Assets and Estate Planning

Estate planning has never been easy for many reasons, not the least of which is that it’s something most people just don’t want to deal with.

But with the growing (maybe exploding) use of digital media, estate planning has become even more complicated, in part because it is a challenge to reconcile what you put on paper in a will or other document with what you put out on the Internet. Exactly how to deal with your digital assets after your passing is an ongoing issue that some states, including Florida, have started to consider.

Think about this. You have social media and networking accounts including LinkedIn, Facebook, Twitter YouTube and others. What happens to them when you die?

Most of these social media platforms will not let someone – even a relative – have access to your accounts, although that is slowly changing. Facebook now allows you to name a legacy contact – a person who can post your obituary on your timeline and convert the site to a memorial page. But in order for that person to have access, you must identify them in advance to the social media platform and designate that they are in that role.

Even more complicated than what happens with your social media accounts is what transpires with your online social media accounts.

Florida passed the Florida Fiduciary Access to Digital Assets Act in 2016. Described as a good first step by many in the field, this law identifies what would be considered digital assets. It also identifies who can be the custodian of your digital assets and gives them authority to work with your financial institutions.

But while the law is in place in Florida, it does not help you or your beneficiaries if you don’t take the necessary steps by which your assets can be dealt with after your passing, or after you become unable to communicate your desires and wishes.

So the best message I can give you is to act quickly to deal with all your assets in appropriate estate planning and be sure to include digital assets in that planning. As always, I can help you through that complicated process.

Leaving Assets to Children

Leaving assets to minor children and having those assets stay protected is often a challenging process. It is a little easier when leaving assets to adult children because of the assumption that, in most cases, they will know how to appropriately deal with these new assets.  Unfortunately, even with grown children, financial responsibility is sometimes a problem.

If there are multiple children, you must consider how to treat your children fairly. That may involve a decision as to how to divide your assets among your children. Treating children fairly does not necessarily mean that each gets an equal amount of your estate. When considering how to leave assets to your adult children, first decide how much you want each one to receive. There may be legitimate reasons why one child would get more than another – maybe based on their careers for example, one might be a brain surgeon with an extremely high income and another might be barely making ends meet.  For some, a consideration is who has been more conscientious about taking care of you in your later years.

You may also be concerned about giving too much to your children. Will a large inheritance change their lifestyle in a negative way? You might consider giving some inheritance directly to grandchildren. One of my future articles will deal with how to give assets to minor children or grandchildren. And of course, you could decide to leave some of your assets to a charitable cause.

If you are planning to give children different amounts, it would be very important to have a  conversation with your children about your decision and your reasons for the decision. That may or may not avoid any possible ill will that could occur later.

Once you’ve decided how much, you need to focus on how.

An option is to start giving away some of your assets to your children while you are still alive. That way you get the enjoyment of seeing their responses. This could be in the form of helping to pay for a new home, or college tuition and fees. For some, making gifts has tax consequences.  You should consult with a lawyer or CPA before making gifts of a substantial amount.

Another decision is how you want your children to receive their inheritances. You have several options from which to choose. There may be some family heirlooms that are particularly special for one child or another. Giving those to your children while you are still alive can be a great emotional experience for everyone.

More traditional is giving away your assets in a lump sum. This generally, but not always, occurs through a will after your passing. One consideration about this method is how responsible your children are. You don’t want to give someone a significant amount of money or other assets, if they have never shown the ability to budget and handle money wisely. If they are not careful, that inheritance can be lost to creditors, bad investments or other factors. If you have concerns about in-laws and whether your children are in marriages that could become problems that would be another reason to hold off on a lump sum.

If you have concerns about giving your children a lump-sum inheritance, installments could be the answer. You might even start this while you are still alive to give guidance and guard against them spending an inheritance unwisely. You can set up any kind of installment plan – breaking up the inheritance so your children receive a certain amount every few years. You might consider a certain amount when children reach a certain age. That way, even after you have passed away, it’s possible a child might learn from bad financial planning with the first installment.

Finally, you can consider setting up a trust – even for adult children. That way you can provide for them without their getting the assets directly. Assets in a trust are protected from their creditors, lawsuits, irresponsible spending and ex-spouses. This is especially helpful for any special-needs dependents, or if a child were to become incapacitated. Any other benefits they may be receiving would not be in peril from an inheritance. Trusts also allow you to motivate a child who might need some incentive to earn a living. If your child is financially secure, you can set up a trust for your grandchildren and future generations as well. This option allows for flexibility and offers control and protection over the assets you worked hard to accumulate.

There is no one-size-fits-all choice. You need to take a hard look at your family and learn your options. I can help you through that process, so you make the best decisions for you and your family.

Asset Protection Planning: What is It and Why is It Important?

Asset protection planning is a process that includes a variety of methods to do one simple thing – protect your assets from creditor claims down the road.

As an individual and possibly as a business owner you have collected assets over the years with the ultimate goal of living well in the future and, if applicable, passing something on to your heirs. Unfortunately you never know what’s going to occur down the road. You may find yourself in a position where creditors choose to file claims against you. If these claims turn out to be legitimate, the assets you have built up over the years may be in danger.

Because the future is an unknown, there are steps you can and should be taking right now to protect these assets. If you wait until a claim is filed against you it may be too late to protect your assets.

Some of the strategies you can take now to protect your assets in the future are obtaining the proper insurance, titling assets appropriately, creating a retirement plan, and structuring your business assets correctly.

Start with insurance – the simplest and most common form of asset protection. Auto, home and life insurance are basics. But you should also consider other types of insurance, including malpractice (if it’s appropriate for your work), fire, casualty, liability, personal umbrella and, if you are running a business, officers and directors liability insurance.

As far as titling an asset, you can consider having the majority of family assets in someone else’s name – a spouse or some other trusted relative. An irrevocable trust is another possible asset owner. As you might suspect, retitling assets in someone else’s name or some entity name should be carefully considered.

Retirement plans, including 401ks, IRAs and other methods are excellent ways to protect your income and assets. Inherited retirement assets are not necessarily protected from creditors of the beneficiary who inherits those assets however. There are ways to protect retirement assets in the hands of beneficiaries as well.

If you own a company, how that company is structured can help you protect you and your business from creditors. The options include different types of corporations, a limited liability company or some combination.

This is just a sampling of some of the things you can and should be doing to protect your assets. One thing is certain. It is an extremely complicated process – one that you should not consider doing without some legal guidance. I would be glad to help guide you through these critical and necessary procedures.

The Complexities of Estate Planning: Part Two

A few weeks ago, I wrote here that one of the biggest challenges to estate planning is simply understanding some of the terms involved. In that article, I offered some basic definitions of the following terms:



Estate Tax


Here are a few more terms that are very common in any discussion of estate planning.

Trust – A trust is a relationship that has one person, who is known as the trustor or grantor or settlor, giving another person, the trustee, the right to hold the trustor’s assets or property for the benefit of another person or people – referred to as the beneficiary. The most common reasons to create a trust are to reduce estate tax liability, to protect property in your estate from creditors, avoid probate and, perhaps most importantly provide for beneficiaries, minor children for example, who would not be capable of managing or take care of assets on their own. Another major benefit of creating a trust is to have in place a way that you can be protected and provided for if you were to become incapacitated so that you are unable to handle your own affairs

Living Trust – A living trust, which can also be referred to as an inter vivos or revocable trust is the legal document that holds your assets into a trust during your lifetime once those assets are transferred from you to your trust. Those assets can be managed by a successor trustee for you if you become unable to handle your own affairs or can later be transferred to designated beneficiaries at your death by your chosen representative – the trustee. The term revocable means you can change the terms of the living trust or just get rid of it at any time.

Health Care Surrogate Designation – Also referred to as an advance directive, this is a document that enables you to state your wishes regarding end-of-life medical care, in case you are no longer capable of communicating your desires. You name a designee whose responsibility is to see that your medical care is based on your wishes.

Living Will – A Living Will is an expression by you of your wishes regarding end of life care in the event you are unable to make those decisions for yourself.

Will – Probably the most common if not fully understood legal document related to estate planning. With a will, you express how your property should be distributed at your death. It names a person called an executor or personal representative – to manage your estate until final distribution is completed.

One major misconception I hear over and over again regarding wills is the idea that “if I have a will, I don’t have to go through probate.” That is simply not true. There are ways to avoid probate but doing a will is not one of them.

Discussing estate planning with your family is often challenging on many fronts. Probably the biggest hurdle is simply not wanting to talk about your mortality. But, as I have seen over the years, a simple understanding of these and other terms can often make that conversation much easier.

I will continue exploring other terms in future writings in order to help make that conversation easier for you. And, as always, if you need to discuss some of these concepts, I will be glad to help.  Whether you currently have a plan and wonder if it needs to be reviewed and updated or if you know you need to get a plan in place but just don’t know where to start, I am available to answer questions you may have in a brief meeting with no obligation on your part.  Please be aware I cannot have such initial consultations over the telephone or via email.

Estate Planning: Don’t Procrastinate

“I know I need to get my estate planning done. I’m just not ready.”

I hear that or something very similar to it regularly. There are a lot of reasons why people are not getting their estate planning done. But frankly, I think of them more as excuses rather than reasons.

Here are some of the most common excuses I hear from people who are putting it off.

  1. I’m not old enough. My response to that is what is the right age? If you had some guarantee that you were going to live a certain number of years, this might be valid. But unfortunately, none of us have that guarantee.
  2. I don’t have enough assets. This couldn’t be more wrong. Estate planning is not just for the wealthy. The cost for court guardianship and probate may actually come to a greater percentage of a smaller estate than it does from larger ones. You may not own a lot but without estate planning, what little you have could end up with the court and attorneys rather than your loved ones.
  3. It’s too confusing. I can’t argue too much with this one because it’s true that estate planning is complicated. That’s why you need to go through the process with a qualified estate planning attorney.
  4. I don’t want to think about who should get what. This is a challenging issue. If there are multiple children, it may be a good idea to talk to them. You may be surprised about what you hear.
  5. I just don’t want to think about it. This is a sensitive issue. No matter how you frame it, this is a discussion about what happens after you’re gone. It’s not a pleasant thing to consider.

The problem with letting these and other excuses get in the way is that you are creating greater problems by ignoring estate planning. Here are some of the reasons why you should not procrastinate.

  1. Clarifying your wishes. Any estate planning documents should include a will, a living will, durable power of attorney and more. These documents not only explain how you want your estate divided but also explain how you want to be cared for and who should make decisions if you are not able.
  2. Keeping peace in the family. If this planning is completed, you don’t face the risk of a sudden death without it. The result of that could be family arguments and battle, along with the complications of probate.

So while estate planning is something that people tend to not want to deal with, there are plenty of good reasons to start early and get it done. The reality is that nothing you do now is set in stone. If circumstances change, the estate planning can change with them.

What is probate and why is it best to avoid it?

In the most basic terms, probate is the process by which a court concludes your legal and financial matters after your death, and the way in which your estate is distributed. It may sound simple enough but, if it’s that simple why are people always saying you should avoid probate if possible.

The two most significant reasons why you want to avoid the probate process is that it could tie up your estate for months or longer, and it is expensive. In some states the cost of probate could take up to 5 percent of an estate.

A properly executed will may make probate less complicated but even with a will, it can be complicated, especially if there is a large amount of assets.

Here’s how it works. If you have prepared a will and have passed away, the person you named in your will as executor files papers in the probate court. If you did not prepare a will, a person appointed by a judge will file the papers. The executor demonstrates the validity of your will and presents the court with lists of your property, your debts and who is to inherit what you’ve left. Relatives and any creditors are then officially notified about the probate.

Your executor must find, secure and manage your assets during the probate process. The executor must make decisions during this process regarding how to pay your debts. This could include selling off real estate, securities or other property. It is often the case that immediate family members may ask the court to release short-term support funds during these proceedings, and the court will likely grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property gets transferred to its new owners.

There are some things you can do to avoid this cumbersome and lengthy process. You can start with a revocable living trust. There are advantages and disadvantages to a revocable living trust. The primary advantage is that after your death, the trust property is not part of your probate estate because it is technically owned by the trustee who can then simply transfer the trust property to the family or friends you left it to, without probate.

Another way to avoid probate as to some assets, bank accounts can be converted to payable-on-death accounts by filling out a form that identifies a beneficiary. When you die, the money goes directly to your beneficiary without going through probate. Assets such as life insurance and retirement accounts which have named beneficiaries also avoid probate.

A third option is joint ownership of property. Different forms of joint ownership provide a simple and easy way to avoid probate when the first owner dies.

You can also consider giving away property while you’re alive. If you don’t own the property when you pass away, probate is not necessary. Giving property away during your life can have gift or estate consequences however.

There are other options you can consider as well. But the best thing you can do to protect your loved ones after your passing is to take the time to do appropriate estate planning sooner rather than later. If you’re not sure how to take that first step, or if it’s been several years since you did any previous estate planning, I can guide you through that process.

The Complexities of Estate Planning

Helping individuals and families deal with the complex issues of estate planning is both rewarding and challenging. It is crucial that a family is prepared legally as they deal with the emotional issues involved as family members age and ultimately pass away. It is even more difficult when the death is sudden and unexpected.

Among the more challenging aspects of estate planning is the complex variety of terms that families will hear. While it should not be, that alone could be reason enough to put off appropriate planning.

So in this blog and others that will appear here in future weeks, I will try to eliminate that challenge by offering simple-to-understand definitions for some of the terminology you hear when discussing estate planning.

Assets – An asset is anything you own that has some economic value. While some assets may have significant value – such as a home – other assets with more limited worth need to be considered as well when you are trying to determine the total value of an estate.

Intestate – This is something none of us want to have happen. Intestate is the legal term used when someone passes away and has not created a valid will or other binding declaration about what to do with their assets. This often happens for several reasons. It is possible, if a death was unexpected, that a person did not think they needed a will yet, or they did not want to think about planning for their own death. Another possibility is that they did not believe they had enough assets to warrant a will. But even if a person does not have a great deal of assets, there may be family heirlooms or other memorabilia that your heirs may end up fighting over.

Estate Tax – This is a tax placed on assets that are transferred to family members or others upon your death. Among the things that would fall under an estate tax are cash and securities, real estate, insurance, trusts, annuities, business interests and other assets. Proper estate planning can help offset estate taxes.

Beneficiary – Generally, a beneficiary is a person who is eligible to receive distributions from a trust, will or life insurance policy. Beneficiaries can either be named specifically in any of these documents, or they may have met any requirements that make them eligible for the specific distribution.

As I said, this is just a start to Estate Planning 101. More terms and definitions will be coming soon.