Blogs from September, 2021

Planning appropriately for family land is integral to preserving legacy and generational wealth. During my career, I’ve seen the best and the worst-case scenarios surrounding how best to plan for generational land transfer.

The most mind-blowing case I have encountered was when hundreds of acres of land went more than 100 years with no official probate or heirship proceedings. This land had to be apportioned to almost 100 possible heirs, and tens of thousands of dollars were spent in court (wasted) to establish who owned what portion of the acreage. Here are my three tips on how to avoid a situation like this!

1. Stop procrastinating. If you know that grandma and grandpa’s estate was not settled correctly leaving you and your cousins to “share” some land that’s still in grandma and grandpa’s name - don’t wait another minute to get it straightened out. The longer you wait, the more likely it is that infighting will break out, witnesses will move away or die, essential paperwork will be lost, more heirs will need to be involved, and the cost to fix everything will increase exponentially.
2. Don’t use online forms. If I have said it once, I’ve said it a thousand times: If you try to save money using online legal forms, especially deeds, you’re very likely going to spend exponentially more when correcting mistakes.
3. Don’t assume all states are the same. Both estate planning and property laws are broadly the same in every state, but small idiosyncrasies exist and can make a big difference. The most common problem I see in Texas is that people assume there is an automatic right of survivorship in Texas deeds, but that is rarely the case.

Beyond, these tips it is important to stay abreast of federal and state laws that impact the inheritance tax, capital gains tax, changes to generational skipping trusts and more. Currently, there is a lot of TALK in Washington, DC about changing some of these tax structures, but nothing has been enacted as of 9.29.2021. Crain & Wooley will update clients as soon as we hear what, if any, action is taken in Washington impacting financial planning or estate planning laws.

Plan for family land by contacting Crain & Wooley today.

Many people under define / underestimate their status as a small business owner. We often hear statements like this at the office:

• I only own 2 rent houses.
• I only do bookkeeping as a side gig.
• I only have 1099 / contract employees.
• I only lease these 50 acres to a local farmer.
• I only am helping my brother launch his business– am only a 25% owner.
• I only….
• I only….
• I only….

All of the above statements and many others just like them equal business ownership and need to be planned for in a very specific manner

If you are a small business owner, you probably spend a lot of your time in the day-to-day work of your business and when you take time to work on your business, you are spending time figuring out how to stay open and stay profitable. One of the last things on your mind (if it is on your mind at all) is what will happen if I am disabled or when I die?

The problem is that you are likely to be disabled at some point, even if only temporarily, and you will die one day. Both of these events pose major risks for your business, your employees, and your loved ones if you have not thought about AND planned for what happens in the event of your disability and death.

Risks of not having a business succession plan:

1. Business momentum will be lost, including up to, total cessation of the entire business.
2. Business value will drop QUICKLY and possibly entirely during a period of reduced or no operation.
3. Employees may not be able to be paid.
4. Business payments/deposits may not be able to be received/deposited.
5. Business vendors may not be able to be paid.
6. The business will not be able to be sold (if applicable).
7. Courts will likely need to be involved to determine who has authority to act in the absence of the business owner.

What you should be planning for in a business succession plan:

1. Who can run the business in the absence of the owner?
2. How can immediate access be given to the person(s) who have been selected as temporary or permanent successors?
3. What will happen to the business in disability or death?
4. How will employees and other expenses be paid?
5. Will the business be sold at your death, and if so how and who receives the proceeds?
6. How can lengthy, expensive, and potentially difficult court proceedings be avoided?

This past year, we have helped more clients than I would like try to retain business assets that once belonged to a loved one who passed away. If you are business owner and have not formally created a business succession plan – do not keep putting this on the bottom of your priority list.

“Only put off until tomorrow what you are willing to die having left undone” ― Pablo Picasso

Contact Crain & Wooley to create a succession plan for your small business.

Probate is known for being a long and complicated process that many people try to avoid. If you want to save your loved ones from the hassle and expenses of probate, you might be wondering if a will is all it takes to get the job done.

Our Dallas-Fort Worth estate planning attorneys explain if you still need to go through the probate process if you have a will.

Can a Last Will and Testament Help Avoid Probate?

Unfortunately, no. A will requires the probate process to be completed. Before your loved ones can inherit your assets, they must, with the assistance of an attorney, submit an application for probate in the probate court within four years after you pass away. If you fail to probate a will within the four-year time period, then it will become even more costly to wrap up the decedent’s estate.

If your current estate plan only consists of a will, there are other documents that can help your loved ones avoid the probate process when you pass away.

Get answers to common questions about wills and probate in our blog post here.

How Can I Avoid Probate in Texas?

It is possible to avoid probate with careful estate planning. Avoiding probate can not only reduce legal fees but can expedite inheritance distribution. One of the most common ways to avoid probate is through the use of a revocable living trust.

Assets can be placed in a revocable living trust without negative tax consequences. When assets are placed in a trust, the trust creator can still use the assets during their lifetime. However, upon their death, the assets in the trust are passed to the trust beneficiaries listed in the trust document. The transition of assets is often seamless and does not require beneficiaries to complete the probate process.

If you want to develop a comprehensive estate plan that will help your loved ones avoid probate after you pass, contact our Dallas-Fort Worth estate planning lawyers today at (972) 945-1610 to schedule a consultation!