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PHILIPS hi-fi Monaural (PHM 200-229) ... Utilizing 'RLT' puts the business owner in control (Feb. 10, 2013 8:46 PM) ...item 2.. Inheritance issues aren't so cut-and-dry -- 7395165 (Apr 15, 2013) ...
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The RLT is the best solution for planning for the business owner. If properly used, the Trust can put the right people in control of the business, not a judge. Nothing can destroy the value of the business more than burying it in the quagmire of probate or guardianship court.
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... as noted in Life: Trust is good, Control is better. CONTROL IS ALWAYS BETTER !!
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.....item 1).... Utilizing 'RLT' puts the business owner in control ...
Floriday Today ... www.floridatoday.com ...
Feb. 10, 2013 8:46 PM, |
Written by
Stephen Lacey
Finance Q&A
FILED UNDER
Columnists
Finance QA
www.floridatoday.com/article/20130211/COLUMNISTS0703/3021...
QUESTION: If I own a business, should the business be in my Trust?
Answer:There are many reasons why a business owner should utilize a Revocable Living Trust (“RLT”) to plan for their business. The biggest reason is simple: Control!
Q: Who is in control of the business?
A:While the business owner is living and as long as they are Trustee, they are in control of all of the assets that are inside the RLT. This could include the shares of their business.
Q: What happens if the business owner dies? Who is in control and makes the key decisions for the business?
A:If there are multiple owners, the strategic use of a shareholder agreement or an operating agreement sets up the process of what to do and who has what rights in case of a buyout.
Q: But what if we have a sole owner? What should be done with the business? Should it be shut down? Can the business be sold as an ongoing concern? Who should make these crucial decisions?
A:If you use a Last Will and Testament, then a judge appoints someone to run the business, and then a judge approves their plan of action. But this takes time and it requires court hearings, the testimony of experts, as well as money to pay lawyers. In the meantime, critical decisions need to be made in the business quickly, because business as an asset of the estate diminishes in value rapidly.
Q:What about incapacity of the owner?
A: In some cases, death is cleaner and easier for the business. What if the business owner is incapacitated? Who runs the show? What is their mandate for running the business? Who makes the tough business decisions? Logically, it should be the guardian with the approval of the guardianship court. But just like the probate judge, the guardian and the judge are not in any position to make a good business decision. They may be intelligent and wise people, but they don’t know the owner’s business and will probably not be in the best position to make decisions about that business.
The RLT is the best solution for planning for the business owner. If properly used, the Trust can put the right people in control of the business, not a judge. Nothing can destroy the value of the business more than burying it in the quagmire of probate or guardianship court.
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.....item 2).... Inheritance issues aren't so cut-and-dry ...
... Florida Today ... www.floridatoday.com/ ...
Apr 15, 2013 |
Written by
Stephen Lacey
Financial Q&A
FILED UNDER
Columnists
Ask Business Expert
www.floridatoday.com/article/20130415/COLUMNISTS0706/3041...
QUESTION: One of my children is not good with money. Can I do something to protect them with any money I leave them from my estate?
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You can protect your loved ones when you die to ensure when they inherit what you have worked your lifetime for, it stays with them without being at risk of being lost to their divorce, lawsuits, nursing homes, the government or other creditors. / Getty Images/Comstock Images
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LACEY: This is a common question I get when clients come into my office. The child may be a spendthrift or is in a bad marriage. Or sometimes, bad things happen to good people and the inheritance you leave that child is either spent quickly, a portion goes to an ex-daughter-in-law or son-in-law or to a creditor of that child. To illustrate how we address this situation, please find the scenario below.
Cole came into the office to start his estate planning. Cole was a widower and had no children. Cole had in excess of 0,000, and he wanted to ensure that when he died, his money went to his nieces quickly and avoided probate. He heard a living trust was the way to do that. When he came into the office, he discovered issues and options he had not previously thought about. Specifically, he liked the option to ensure that when he passed, rather than leaving his assets to his nieces outright, he could give it to them in a protected trust that permits them access to it for the rest of their lives, but not their creditors, spouses in divorce, nursing homes, the government or lawsuits.
Cole engaged the attorney and set up his estate plan so that when he passed, each of his nieces would receive their 0,000 in a trust for their benefit. The trust allowed each beneficiary to serve as trustee but also provided for a co-trustee, who could be appointed by each beneficiary. When Cole died, his brother, Charlotte, came into the office to administer Cole’s trust. Charlotte was confused, as were his children, as to why Cole left the money in trust instead of outright. They were a little disappointed. After some explanation by the attorney, they said that they understood and proceeded with the trust administration. Each of them received their separate share of uncle Charley’s estate in a trust in which they were named trustee.
About a year later, Virginia, one of Charlotte’s children, contacted the attorney. She was concerned about a recent garnishment that had been put on her account at the bank. Evidently, she had been sued and a judgment was awarded to the party suing her. The creditor executed a judgment against all of Virginia’s assets. Since Virginia was a trustee of the trust left by Uncle Cole, they also put a lock on the trust account in hopes that they could empty it to satisfy their judgment. The attorney quickly explained to Virginia that this is exactly why Uncle Cole had done what he did to ensure if any predators ever attempted to take the money from Virginia, they would be prohibited.
The attorney sent a letter to the law firm for the creditor and to the bank’s attorney advising them any attachment to the account was unauthorized and illegal.
After a quick review of the trust, both the judgment holder and the bank acknowledged the account was not subject to levy and released it. The funds remained available for Virginia’s use without the risk of any further attachment by the judgment creditor or anyone else.
You can protect your loved ones when you die to ensure when they inherit what you have worked your lifetime for, it stays with them without being at risk of being lost to their divorce, lawsuits, nursing homes, the government or other creditors.
Stephen J. Lacey, JD, LLM-Tax is a member in the law firm
McClelland Jones LLC. Lacey concentrates his practice in estate planning, asset protection, Medicaid planning, probate, trust administration and real estate. Contact him at 321-984-2700 or visit mjlandl.com.
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