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STARTING THE PROBATE PROCESS – ARTICLE 1 of 3

STARTING THE PROBATE PROCESS – ARTICLE 1 of 3

STARTING THE PROBATE PROCESS – ARTICLE 1 of 3

              Starting the probate process when a person dies can be an intimidating process.  My experience as a probate attorney Creve Coeur has been that the family of the deceased don’t even know where to begin.

The purpose of this article is to give the reader a step by step guide of how to deal with the probate process in Missouri, what you need to know and what issues may come up.

Step 1:  Request a Death Certificate and Secure Any Estate Planning Documents Like Wills or Trusts

So when a person dies, there will be a “shock period” where initially no one has the details about funeral plans and people are just generally receiving news that the person is deceased.  This is obviously a difficult time for the family and friends of the deceased.

However, it’s during this process that the person who was told they would be in charge of the estate secures a death certificate (usually via the funeral home or company handling the arrangements for burial or cremation).  Also, if the person owned a home, the home can be entered (if possible) and the personal documents of the person secured and removed from the home.  This should include wills, account statements, bills and so on.

If no will is discovered or it’s not clear who is in charge of the estate, then the immediate next of kin (spouse or if not married, children) should handle this first step.

Step 2:  Review the Will and Discover the Assets of the Deceased

If there is a will, the will should be reviewed to confirm who was named as the personal representative (executor) in the document.  From there that person should be in control of the process and they can delegate certain duties to others if they wish.

The mail of the deceased should be forwarded to the personal representative so they can get a handle of the debts and assets of the deceased.

If there is no will, the process can be a bit more complicated.  Under Missouri law, the next of kin has the first right to serve as the administrator (executor when there is no will).  Again, surviving spouse or if none then all of the surviving children have equal rights to be appointed administrator in the probate process.

If there is a trust, that document should be reviewed to determine who the trustee is (this article will deal solely with wills and intestate estates, not trusts).

Step 3:  Meet with a Probate Attorney  / Hire a Probate Attorney

Like many states, there is very little a person can do in probate without hiring a lawyer.  If an estate needs to be opened, an attorney must almost always need to be hired under Missouri law and for the more obvious reason that probate administration is a complex and tricky process.

The initial meeting to start the probate process with the probate attorney will require that paperwork and information be gathered and brought to the attorney’s office for review during the consultation.  Among the paperwork typically needed are:  the death certificate, names / addresses / phone numbers / email addresses / Social Security numbers and dates of birth of all heirs / beneficiaries / executors.

During the consultation, the probate attorney will review all the gathered information to confirm if the will is valid, confirm the executor and discover the assets.  It’s often the case that the decedent (the person who died) has some assets that must go to probate because there is no beneficiary listed, but some assets that avoid probate.

Remember, however, that the will and if no will, the probate only covers assets that have no beneficiary, are not owned by a trust or that are otherwise not jointly held with another person.

The attorney will also want to know what debts the decedent had.  Credit cards are unsecured debts, so the attorney can advise you on how to handle those versus medical bills, outstanding loans and other debts.

The probate attorney can and should go over the probate process (next article) and their fee.

In Missouri, attorneys can charge a fee based on statute (see here).  The statutory fee is the minimum fee that the attorney can charge, but can charge more.  When you are starting the probate process, some attorneys work on a flat fee that may be higher or lower than the statutory fee.

It’s important when you are starting the probate process that you walk out of the meeting with the probate lawyer more knowledgeable about what steps have to be completed.

CONCLUSION

Starting the probate process is obviously an important first step.   Probate is complex in Missouri, as it is in most states.  Whether assets must go in probate is often very nuanced, as are the language of wills.

The next article “The Probate Process – Article 2 of 3” will discuss the different documents and information that need to be filed to initiate the probate, what documents need to be filed after the probate has begun, the rights of creditors while the probate is open and the timeline from start to finish during the probate.

Legacy Law Center assists business owners throughout St. Charles County, St. Louis County, Warren County and Lincoln County with probate administration.  If you’re need of assistance from a probate attorney, call our firm for a FREE CONSULTATION to learn how we can help.  Call us today at (636) 486-2669!

 

 

 

 

Business Succession Planning: Family-Owned Businesses

Business Succession Planning: Family-Owned Businesses

BUSINESS SUCCESSION PLANNING:  FAMILY-OWNED BUSINESSES

            Business succession planning for family-owned businesses is vitally important to their survival after the death of the founder(s).  By some estimates, for example, more than 70 percent of family owned businesses do not survive the transition to the second generation of ownership.

How can this be avoided?  Through proper business succession planning.  This article is an overview of the five levels of business succession planning for a family-owned business.

LEVEL ONE:  WHAT ARE THE LONG TERMS GOALS OF THE FAMILY BUSINESS?

At this first level, the business owner and the best business succession attorney near me have an open discussion and analysis about the long term goals of the business owner.  They discuss current difficulties with the operation of the business, if any, the current financial and health of the business and the lawyer can offer recommendations that are realistically achievable for the family and the business.

LEVEL TWO:  HOW CAN THE SUCCESSION PLAN MEET THE FINANCIAL NEEDS OF THE BUSINESS OWNER AND THEIR SPOUSE?

This level focuses on the business owner in retirement and away from running the business.  What are goals and plans in retirement?  Often a frank discussion of the actual value of the business is needed before these personal goals of the business owner can be discussed.

Once the true value of the business is known the business owner can be better informed about which of their plans and goals in retirement are achievable because the business can provide the income necessary to support those plans and goals.

LEVEL THREE:  WHO WILL MANAGE THE BUSINESS DAY TO DAY? 

This level focuses back on the business to discuss the people who will run the business after the business owner has retired.  Will that be family or employees?  Both?  Is there a successor already in mind and are they ready to take over the management of the business?  Does a mentoring process need to occur, how long with that process take and how will it affect the owner’s timeline to retirement?

If an employee or group of employees will manage the business, how do we ensure they are compensated enough to remain in place after the owner moves on?  Many employees are more loyal to the business owner than the business itself.  These issues need to be discussed and techniques to keep accomplished and trusted employees on board must be employed to ensure a smooth transition.

LEVEL FOUR:  WHO WILL OWN THE BUSINESS AND HOW DO WE TRANSFER OWNERSHIP TO THE NEW OWNER(S)?

This particular level can cause business owners a lot of agony.  Here we are focusing on business succession in terms of which family members will receive ownership interest(s)?  Then the discussion turns to the best and most tax-efficient way to accomplish the transfer of ownership.  Through a sale?  Through gifting?

Should the business owner retain voting shares until the proper child or children to own the business is determined?  This level is among the most complex because there are so many possibilities all of which can be fragmented further by the individual circumstances of the business and family itself.

LEVEL FIVE:  WHAT IS THE PROPER ESTATE PLANNING REQUIRED AND HOW DO WE MINIMIZE TAXES WITH THE TRANSFER OF OWNERSHIP?

This level essentially is the end game because it puts into legal effect the decisions and strategies developed in the first four levels.  Chief concerns at this level are minimizing transfer taxes, whether to employ various gifting strategies, including lifetime exemption and annual exclusion methods.  Installment sales can also be considered as can private annuities.  Both of these are not only sales strategies but can provide a lifetime income to the founding business owner.

A whole host of strategies and options are too wide ranging to discuss in this article but needless to say, whatever estate plan options are chosen are designed specifically to not only effectuate the founding owner’s desires but to ensure that the plan is tax efficient, strategically efficient (if possible) and least likely to cause acrimony among family members and among the business culture itself.

CONCLUSION

All too often business succession and business owner estate planning focuses on the death of the owner, but not the transition of the owner out of the business during life.  All businesses, however, benefit from planning for the inevitable and especially benefit when this planning is done long in advance of problems.

As with traditional estate planning, completed business succession planning can provide peace of mind to the business owner that his family, like the business, is in good hands.

Legacy Law Center assists business owners throughout St. Charles County, St. Louis County, Warren County and Lincoln County to develop a succession plan for their business.  If you’re a business owner and  need to speak to an attorney about a business succession plan, call our firm for a FREE CONSULTATION to learn how we can help.  Call us today at (636) 486-2669!

 

LEGAL PLAN BENEFITS:  A HUGE REASON TO GET AN ESTATE PLAN

            In the last decade or so, legal plan benefits have become very popular in Corporate America.  One of the most popular uses for legal plan benefits is to create an estate plan for you and your family.

WHAT ARE LEGAL PLAN BENEFITS?

Legal plan benefits are a benefit offered through some employers which allow the recipient / employee to  hire a lawyer to resolve a legal issue at a greatly reduced cost and sometimes free of charge.

HOW MUCH ARE LEGAL PLAN BENEFITS?

Legal plan benefits can vary in cost.  Often employees pay a fixed cost each pay check.  Some companies offer different coverage levels at different costs and still other companies offer them as a free benefit to their employees.  Contact you Human Resources Department for further details about legal plan benefits through your company.

CAN THEY COVER FAMILY MEMBERS AND THEIR LEGAL MATTERS?

It depends on your employer’s plan.  The benefits almost always cover immediate family members and other dependents.  Less often they cover extended family, for example the parents of a benefit recipient.

DO THEY COVER ESTATE PLANNING?

Yes and as an estate plan attorney O’Fallon our offices have helped many families who receive legal plan benefits to create estate plans.  In fact, creating an estate plan is among the most popular uses of legal plan benefits.

ARE ATTORNEY SERVICES UNDER LEGAL PLAN BENEFITS JUST AS GOOD AS PRIVATELY PAID? 

Yes and there should be no difference if a client is paying a lawyer directly for legal help or is receiving payment from legal plan benefits.  Our office, in fact, makes no distinction between legal plan clients and private pay clients.  The process is the same and so is the attention level to their matter.  I suspect that’s why our office has had so many legal plan clients.

DO LEGAL PLAN BENEFITS PAY ATTORNEYS AS MUCH AS PRIVATE PAY CLIENTS?
No.  Service fees are reduced significantly to the attorney.

IF SERVICE FEES ARE REDUCED, HOW DO LEGAL PLAN BENEFIT PLANS HELP LAWYERS?
There are several advantages.  For one thing, we are often reaching clients who would not call us without having the benefits.  The best example would be a young couple calling to create an estate plan.  Many of our legal plan clients are in fact younger.  So we capture a different age demographic of clients that we ordinarily would not work with.  Also, there is no outbound cost to our firm to acquire legal plan clients.  For example, no advertising cost is required.  To some lawyers, the reduced fees are too low and they do not participate in the plans.

WHAT ARE SOME OF THE LEGAL PLAN BENEFIT COMPANIES?
The most popular legal plan benefit company is Hyatt Legal.  Another company is ARAG.  Finally, a less popular but good legal plan benefit company is LegalShield.  Legacy Law Center works with each of these legal plan benefit companies and considers each to be very good.

ANY ADVICE ON USING LEGAL PLAN BENEFITS?

Yes.  Treat the research you are doing on various law firms and attorneys who can handle the legal plan benefit work you need just as if you were paying out of pocket.  Educate yourself on what you need, review the ratings and websites of lawyers.   Don’t just pick a lawyer because his or her office is down the street.  Also, check to make sure that the particular service you need is something they do a lot of…believe it or not there are still a lot of “general practice” attorneys practicing law.

Legacy Law Center assists legal plan recipients throughout St. Charles County, St. Louis County, Warren County and Lincoln County.  If you have a legal plan through your employer, call our firm for a FREE CONSULTATION to learn how we can help.  Call us today at (636) 486-2669!

 

POWER OF ATTORNEY:  FIVE REASONS WHY IT’S SO IMPORTANT

A power of attorney is a legal document that allows a principal (one person) to allow another person (an agent or an attorney-in-fact) to make healthcare and/or financial decisions for them if they cannot make those decisions themselves.

Powers of attorney are a cornerstone of any estate plan.  As a power of attorney lawyer, Creve Coeur, Missouri, I include powers in just about every estate plan I draft for clients.

This article dives a little deeper into why power of attorney documents are so important for a person to have.

#1           IF YOU BECOME INCAPACITATED AND DON’T HAVE A POWER OF ATTORNEY YOU CAN’T CREATE ONE

A person creating a power of attorney must have legal capacity to do so.  That is, they must understand what powers they are giving to another person, they must be able to identify the relationship of that named person to them, they must know what assets they have, and this is among other questions they must be able to answer.

A person who does not have capacity cannot create a power of attorney.  Someone must file a petition for guardianship in the county in which you live to be appointed, after a hearing in front of a judge, as your guardian (a person appointed to be legally responsible for and to manage an incapacitated person’s affairs) and often also appointed as conservator (a person appointed to manage the financial affairs of an incapacitated person).

#2           WITHOUT A POWER OF ATTORNEY YOU LOSE THE RIGHT TO NAME WHO YOU WANT TO MAKE DECISIONS ON YOUR BEHALF

When you visit a power of attorney lawyer St. Peters, Missouri, you get to name who you want to be in charge and who would be the alternate(s) if your first choice cannot assist you.  Think about how important it might be to name a specific person in your life versus the right of anyone to seek to be appointed as your guardian / conservator.

Like so much of estate planning, creating a power of attorney is about having control over who is in charge, which creates peace of mind.   Think about how important that might be if you have multiple children and prefer one or two of them to make decisions for you.

#3           CREATING A HEALTHCARE POWER OF ATTORNEY WITH AN ADVANCED DIRECTIVE MEANS YOU ARE LEAVING INSTRUCTIONS TO YOUR FAMILY FOR THE END OF LIFE. 

An advanced directive, also called a healthcare directive or living will, is a set of instructions to your power of attorney in the event that you are in a coma, terminally ill and/or seriously incapacitated such that you cannot tell your treating physician how to proceed to treat you.

In an advanced directive you are electing procedures to be not given  (withheld or withdrawn) if your treating physician does not think they will lead to a significant recovery.   Imagine if you could no longer make decisions for yourself because you were in a coma.

Without an advanced directive, your family member(s) may struggle to withhold medical treatments, artificially supplied nutrition for example, which will keep you alive but with no quality of life.  Your family, like most families, will struggle to make the right medical decisions without instruction.  The advanced directive leaves nothing to guess and therein lies its power.

#4           EVEN IF YOU’RE INCAPACITATED, LIFE GOES ON…

Every day we speak to people regarding our personal affairs, we provide passwords and usernames to prove who we are and we have to spend time every few weeks paying bills, doing banking, calling insurance companies and doctor’s offices, hospitals and government agencies.

With a power of attorney in hand, you’re naming someone to do that for you if you can’t.  This ensures that you don’t miss paying bills, miss filing a tax return, miss receiving a pension or Social Security payment and of course, everything else.

#5           CREATING A POWER OF ATTORNEY LEAVES YOUR FAMILY PREPARED

Once you’ve created a power of attorney document, the real “power” is being able to sit down with your family and prepare for incapacity.  In short, it’s a very good conversation starter between, usually, parents and their grown children.  The opportunity to face the inevitable, to talk openly about your desires if you can’t care for yourself and to review the document which gives the power to you chosen agent.

Thus, the act of creating a power of attorney does not just plan with the document.  Rather, it also plans with the chance to have an open and frank discussion with family.

CONCLUSION

Powers of attorney have so many other great benefits.  Perhaps one of the best things about a power of attorney is that they are not all that expensive to create, especially when you consider their importance.

Legacy Law Center assists clients to create Power of Attorney documents throughout St. Charles County, St. Louis County, Warren County and Lincoln County.  If you’re in need of a power of attorney and/or other estate planning documens, call our firm for a FREE CONSULTATION to learn how we can help.  Call us today at (636) 486-2669!

Five Trustee Duties in Missouri…

Five Trustee Duties in Missouri…

FIVE TRUSTEE DUTIES IN MISSOURI

                The job of a trustee, generally speaking, is to administer the trust.  A trustee, in fact, has a fiduciary duty to the beneficiaries of the trust. That means they must always act in the best interests of the trust beneficiaries.

All too often, however, I encounter trustee who have been thrust in the role with no idea of what they can do (trustee powers), what they must do (trustee duties) and what they can’t do.

This article discusses five duties of trustees (not a complete list by the way) for trustees in Missouri:

#1           A TRUSTEE MUST READ THE TRUST

A common answer to the question from a trustee asking “Can I do this?” is for the attorney to reply, “Well, what does the trust say?”  Too often trustees make mistakes because they don’t know if the trust allows them to take a specific action.  If the trust allows action, it’s almost always permissible action to take by a trustee.  So read the document and remember #2.

#2           HIRE PROFESSIONALS

I’ve read well over 1,000 trusts in my career and I can remember maybe a handful that didn’t provide that the trustee can hire professionals like accountants, financial advisors and attorneys to assist them with the various accounting, investing and legal responsibilities of serving as a trustee.

In the case where a trust lacks a provision allowing the hiring of professionals, the Missouri Trust Code does allow it under RSMo. 456.8-816(d)(25).  A trustee without the requisite expertise should not be completing and filing tax returns, making legal judgments on trust issues or investing trust funds.

In all cases, they can and should hire the right professional to assist them.

#3           BE LOYAL, BE IMPARTIAL AND ACT PRUDENTLY

Trustees can get in trouble (and can be removed as trustee) for self-dealing, preferring one beneficiary over others or failing to act.  You may like one beneficiary more than another, but you can’t administer the trust in such a way that such a preference is obvious.  A trustee also shouldn’t self-deal, i.e. selling trust property to a spouse for less than fair market value, taking trust funds and using trust funds inappropriately.

#4           KEEP GOOD RECORDS

Another common no-no committed by trustees is poor record keeping.  As a trust lawyer Maryland Heights, Missouri, I commonly see trustees who claim trust expenses were paid but they don’t have any proof of the payment, such as an invoice or a receipt.  Often there is nothing improper going on, but it doesn’t look that way because of the lack of supporting documents for trust expenditures.  For less than $15, a trustee can buy an accordion file to hold bank statements, receipts and invoices by month.  In other words, not keeping good records is inexcusable.

#5           KEEP BENEFICIARIES INFORMED AND RESPOND TO INQUIRIES

It’s not uncommon for beneficiaries of a trust to call me complaining that a trustee will not return their calls or respond to requests for information.  I then have to write a letter formally asking for a response on behalf of the beneficiary.  Then maybe a few weeks later, I get a letter from a lawyer hired by the trustee explaining what’s going on.  Simply stated, nothing will cause problems in the administration of a trust by a trustee more than a lack of communication.  A trustee who doesn’t return calls or respond to emails is assumed, usually incorrectly, to be living the good life on a Caribbean island rifling through all of the trust funds in the process.  The best and most affordable way to avoid this assumption is simply to respond.  Even if you don’t have an answer, you can just say you’ll get back to them with an answer.

Now, to be fair, a trustee will often encounter beneficiaries who will be unreasonable in their requests for information and can never be satisfied no matter what response the trustee gives them.  In that case, it’s always better to only communicate via email so you can have a record of the beneficiaries actions in the event that you end up in court.  Avoid making things personal and stick to the facts.

CONCLUSION

Serving as a trustee is the acceptance of another person’s faith in your ability to serve as a trustee. Always remember that.  You were chosen for a reason.  But you have a large responsibility to act in accordance with the trust terms and Missouri trust law.

Legacy Law Center assists trustees throughout St. Charles County, St. Louis County, Warren County and Lincoln County.  If you’re a trustee and not sure how to administer the trust or to deal with a problem, call our firm for a FREE CONSULTATION to learn how we can help.  Call us today at (636) 486-2669!