Litigation

Common estate litigation involves disputes over the validity of a will or          the meaning of a valid will. There are also disputes over who the heirs or legatees are or over who owns property claimed by the estate. Litigation where an interested party charges the executor or administrator with wrongdoing is also common. There are also suits by estates to recover          amounts owed or for wrongful death. Similarly there are suits against estates for amounts owed or for property  damage or personal injuries.
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Business Succession Planning

n estate planning this phrase refers to planning for the transfer of business ownership and control to the right persons while minimizing the tax cost. The concept usually applies to closely held family owned businesses.                    

In a typical situation a business is owned by a father whose wife will          probably survive him or it is owned by both spouses. They have children who they wish to share equally in their wealth after their deaths. However, not all of the children are able to run the business nor are all of them interested in doing so. The business comprises most of the parents'          assets.

                   

The parents want to retain control of the business up to the date of their          death or at least up to the date of their retirement. After they give up control they want to retain a right to income.

                   

Since the children have to share equally and the business is the bulk of the estate, they will all get an interest in the business. However, maybe only one of them should be put in control. That one, however, may pay him or herself very well and not distribute any funds to the other children. If they are all in control they may fight over the business.

                   

One way to solve  all these problems is for the parents to sell the business          while they are alive. If none of the children can run the business this may be necessary anyway unless plans can be  made to hire a qualified manager. The cash from a sale is easier to divide. On the other hand it (or the securities it is invested in) will be valued at the market in the parents'          estates. Transferring business interests to children allows for some estate tax savings because of using lower values  for tax purposes.

                   

If the children  are going to wind up owning the business then consideration must be given to how it will be structured to allow one or more to run it while the rest are protected. Voting and  non-voting interests can be used to allow equal ownership, but not equal control. Contractual arrangements can be  instituted, such as a shareholder's agreement. This can set          restrictions on transfer of the stock, provide for buyouts, call for income distribution and in general provide a framework for handling a variety of business issues.
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Beneficiary Designation

Many assets are structured in such a way that the owner can designate who will be the new owner upon the present owner's death. The form used to do this is often called a beneficiary designation. The act of designating the beneficiary or the fact of a beneficiary having been designated are also          referred to by the term. Examples of assets which often allow beneficiary designations are life insurance policies, retirement plan interests (such as pension, profit sharing and 401k plans), and IRAs. Bank accounts often allow the equivalent of a beneficiary designation. This can be referred to as a pay on death account or a tentative or Totten trust account. The designated beneficiary gets it on the death of the owner, but has no rights as long as the owner is alive.
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Asset Protection

A variety of steps can be taken to protect assets from creditors. One          simple step is to transfer your assets to your spouse. This assumes you have a healthy marriage and that your spouse's creditors are not a problem. It may also interfere with planning to avoid estate taxes. Other devices which are sometimes used are:
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Antenuptial Agreement

This is a written agreement entered before a marriage that usually deals with what happens to the parties' assets and income in the event of divorce or death.   For instance, it can specify what a surviving spouse gets on the death of the other spouse.   It can increase or decrease inheritance rights. To be enforceable each party should have separate legal counsel, each party should make full disclosure of all income, assets and other material facts, and no duress should be involved. This is also called a pre-nuptial agreement.

Avoiding Probate

Many people want to avoid probate for the following reasons:

• It is expensive. 
• It takes time. 
• It is public. An estimate of the value of your assets is filed and an inventory of property may be filed 
• It provides a forum for creditors to get paid. 
• It allows a spouse to claim a statutory share of the estate. 

On the other hand --

• It is often just as or more expensive to arrange your affairs to avoid probate and it often does not work. Also many of the expensive things which must be done after death must be done whether or not there is probate.
• Probate allows creditor claims to be barred. If proper notice is given claims are barred unless they are filed within a certain time. Creditors can also attack arrangements meant to avoid probate if they were also meant to avoid creditors. 

Whether or not it is desirable to avoid probate is something which must be determined in each individual case. Many people believe that avoidance of probate avoids estate taxes. That is not so and should not be a consideration.

How can you avoid probate? By not having any assets which require a will or the law to say who gets them when you die. If they pass to someone named in some document other than a will or the statutes you avoid probate. Among devices which will do this are --

• Trusts 
• Joint Tenancies 
• Beneficiary designations 
• Pay on death accounts. 

In smaller estates use of the last three items is often very effective. But if any substantial amount of assets exist in your sole name without any beneficiary designation there will still be probate. If you are going to avoid probate you must make these arrangements for all your property. You must also arrange to have all property you acquire in the future subject to such arrangements.

The same can be said of living trusts which are a very popular way of avoiding probate. There will still be probate if only some of your assets are transferred to the trust. All your property must be transferred to the trust to avoid probate. Just signing the trust document is not enough.