Wednesday, May 19, 2010

How Not To Leave Money To Your Son-in-law or Daughter-in-Law?

The number one concern that I often hear is that parents do not want their son-in-law or daughter-in-law to access their inheritance in case of a divorce. The divorce rate is this country exceeds fifty (50) percent. Many parents are concerned that their inheritance will be subject to their child's divorce proceeding. This is a valid concern. This blog will discuss how to not leave your money to your son-in-law or daughter-in-law.

A will does not protect your inheritance from a divorcing spouse. For example, Ida is a widow and dies at the age of 83 years old. Her daughter is 50 years old, Laurie, and her son is 45 years old, Jack. Her daughter is married to John and John and Laurie are going through a divorce. Ida leaves Laurie and Jack each $125,000 and fifty (50) percent of the family house in the Naperville, Illinois worth $350,000. The house in Naperville is paid in full with no mortgages. In this example, John, the divorcing son-in-law will be entitled to fifty (50) percent of Laurie's inheritance. The inheritance, which was meant for Laurie has a creditor, John, which is a threat to her inheritance. Therefore, a will is a bad instrument to protect against a son-in-law or daughter-in-law from getting access to your adult children's inheritance.

In contrasts, a living trust or otherwise, known as a "Revocable Living Trust", is an excellent vehicle to protect your adult children against a divorcing spouse. In a Living Trust, the Trustor or creator of the Trust can create a "spendthrift provision", which restricts your beneficiary's inheritance from being subject to a divorcing spouse or any creditor of your beneficiary. For example, using the above example, Laurie's inheritance would be protected against her divorcing spouse, John. Now consider, what if Laurie had a mortgage foreclosure case filed against her and she was getting an inheritance. With a living trust, her inheritance is protected. On the contrary, a will does not have a spendthrift provision, and a person's inheritance is subject to creditor's claims and divorcing spouses.

Sean Robertson, Esq.
Robertson Law Group, LLC
(312) 498-6080 or (630) 364-2318

Tuesday, May 18, 2010

Top Five Simple Steps for Estate Planning

The first step for estate planning is to determine who you desire to inherit your assets. This is important because prior to speaking with an attorney, you should have a general idea of who are your beneficiaries.

The second step for estate planning is to identify who you will appoint as an executor or trustee. An executor is the person that administers a will upon the decedent's death. An trustee is a person that manages a trust agreement. Executor or trustees are important positions because they will have significant financial responsibilities. You should be prepared to have up to three (3) executors and trustees. This is important because your first executor or trustee may not be available or desire the position.

The third step for estate planning is to identify potential family conflicts that could occur. You should establish a practical and effective plan to address family conflicts. For example, if you own a house, what is the process for selling the home. If you have multiple children, your children may have different expectations than their other siblings.

The fourth step is research whether a will or revocable living trusts or living trusts is more appropriate for your situation. Typically, if you have a home, a living trust is better than a will. A will must undergo probate court, is public record, and is more costly in the long-run. It is more costly because probate court, attorney's fees, and court fees add up quickly.

The fifth step is having two (2) to three (3) witnesses and a notary public present while you sign your will or trusts. You should not have any witnesses that are inheriting under your will or trusts. Your notary public and witnesses should witness you sign your will or trusts.

In conclusion, estate planning is important because it families family conflicts, which if not managed effectively, are costly and destructive. Sean Robertson is Principal of Robertson Law Group, LLC. Sean Robertson can be reached at 312-498-6080 or 630-364-2318. Robertson Law Group, LLC has offices in Naperville, Chicago Ridge, and Naperville.

Resolving Family Disputes Over a Family Business

In a family business, business and personal relationships are intermixed and often times, hard feelings occur. Today and going forward, business succession planning for family-owned businesses is critical. The first concern for family businesses is how to transfer the family business to the next generation without tax liability (later article). The second concern is who should manage the family business as the new President/Chief Executive Officer. Parents often times find it difficult to pick, which son or daughter should take over the family business upon their retirement or death. It is a good idea for a business owner considering retirement to begin making critical succession plans. One of the ideas may be to slowly transfer the adult children into making more critical decisions for the family business. This enables the Parent(s) to determine, which adult child is the better leader and business person. The third concern is how to compensate adult children that are not active in the family business. By active, I mean that do not actively work day by day in the family business. If one adult child is expecting a profit's payment or bonus similar to owning shares of stock/membership interest than their interests contradicts the active adult child's interest. Going forward, it may be best to address this situation and what your concerns are. The key point is it may be better to have an adult child not active in the business inherit life insurance versus the family business. The purpose of this is to avoid family conflicts and create conflicts, which naturally will exists. A good part of estate planning is anticipating family conflicts that may arise and planning to avoid these conflicts.

In conclusion, business transfer planning is critical for family-owned businesses. Business and personal feelings get mixed up and family relationships may it difficult to make key business decisions. Good estate planning can help avoid family conflicts and disputes.

Monday, May 17, 2010

Asset Protection and Hulk Hogan

The basic point of this article is how Hulk Hogan got sued by a person who his teenage son hit with a car registered in Hulk Hogan's name. This personal injury lawsuit was a big lawsuit because the victim was injured in a severe way.

In this lawsuit, Hulk Hogan's personal assets were exposed because his car insurance coverage was too low. Generally, your car insurance coverage should be a million dollars if you have substantial assets. Plus, an umbrella policy is a good idea. The reason asset protection is important in this situation is because your teenagers may get in an accident and cause damages to another person(s). Unfortunately, insurance coverages can be inadequate or often times, insurance carriers deny claims. Neverthless, Hulk Hogan would have settled this matter for a much better settlement if asset protection had been established prior to a lawsuit. Asset protection increases negotiation leverage because your assets may not be seized in case of a lawsuit, or at least your personal assets are judgment proof.

Asset protection is a strategy of protecting one's assets prior to a lawsuit. Proper asset protection is not fraud and it combines trusts and business entities such as LLCs to maximize protection of personal and business assets.

Sean Robertson is Principal and Attorney of Robertson Law Group, LLC. Sean Robertson concentrates in Asset Protection, Estate Planning, and Corporate law. Sean Robertson can be reached at 312-498-6080 or 630-364-2318.

Wills for Seniors

This afternoon, I had a gentleman from Naperville call me for his mother who is currently in hospice. The family wants to put together a quick estate plan for their mother. This is a pretty common request. Unfortunately, many individuals and couples post-pone estate planning until the last minute.

Unfortunately, many law firms do not offer mobile services where they will visit the dying mother. Here at the Robertson Law Group, LLC, we are mobile and we do visit clients at their hospital, hospice center, or their location. Obviously, the first question that arises is a senior capable of making a will.

We obviously will evaluate whether there are any drugs that are being given to the client that would interfere with their ability to make an intelligent and voluntary decision. More importantly, it is important to respond quickly because days may not be available.

Sean Robertson, Esq.
Robertson Law Group, LLC
(312) 498-6080 or (630) 364-2318

Friday, May 14, 2010

Preparing for Family Dispute Over Will

Preparing for a family dispute over a will is wise. Two days ago, I spoke with a prospective client about how they are having a dispute over who was a proper heir of a deceased person. At issue is whether a person named "Sue" (made up name) is entitled to a share of "John's" estate even though nobody from John's family knew of Sue. With this estate, the legal battle has been going on since 2008. A lot of money in attorney's fees and costs have been spent due to a estate conflict.

Unfortunately, will contests and estate matters are often highly contested. One should prepare for a family dispute because each family has conflicts that can cause family strife. Who is likely to have a family dispute? Second marriages with step children are the most likely will contests. Second, a will where one family member gets a disproportionate share of the estate at the expense of the other siblings. Third, estate plans, which are too complicated and difficult to interpret. Fourth, matters where one sibling lives at home with mom or dad and another sibling is more successful. Thus, what happens is one sibling wants the family home while the other sibling wants to sell the family home. With most wills or living trusts, no provision or thought is giving to this situation.

In conclusion, my simple advice is easy. Prepare in advance, so your family avoid family conflicts. Conflicts ruin families and cost thousands to hundreds of thousands of dollars. Living trusts unlike wills are a good option of decreasing the chance of a estate conflict or dispute. Living trusts provide privacy and there is no requirement of mailing out notices to disinherited heirs unlike probate court. I hope everybody has a great Spring day!

Sean Robertson, Esq.
Robertson Law Group, LLC
(312) 498-6080 or (630) 364-2318