Main Misconceptions About Estate Planning

Family Law, Real Estate Law

Many individuals delay estate planning due to the fact that they believe it is too expensive or complex for them as well as not very important for their family. Nonetheless, estate planning does not certainly need to be tough, and the typical person can and should have an estate plan that is conveniently understandable and doesn’t cost a lot. In this post, McKoon, Williams, Atchley & Stanley explain main misconceptions about estate planning for Chattanooga citizens.

Misconception #1: Estate planning is only concerning money.

Although finances could be the main reason for creating a will or trust, estate planning influences family members far beyond the handling of funds. Such plans simplify the life for your relatives during a time of loss and despair. A well-balanced strategy permits you to share your wishes as well as values after your passing away, assists your beneficiaries stay clear of a lengthy as well as costly probate procedure, and reassures relatives that they are doing just what the person would certainly have desired. In the first place, estate planning is about family, legacy, and also love.

Misconception #2: Estate planning is expensive as well as lengthy.

As a matter of fact, it’s just the opposite. Regardless of the initial cost of involving a lawyer to draft records, great estate planning saves both time and money in the long term. Without an estate strategy, your heirs will be entrusted to sustain probate, which is prolonged and also entails lawyer costs throughout the procedure.

Myth #3: Estate planning is only for wealthy people.

Possibly the most usual estate planning misconception is that the common household does not have an “estate.” Actually, an estate describes things you have, such as a residence, a car, or a saving account. Establishing an estate plan not just offers direction, yet offers advice for loved ones throughout a difficult time. An estate strategy makes sure that:

  • Your financial resources are managed if they become incapacitated
  • Decisions concerning the health care will be accomplished as planned
  • Children and also other heirs will be taken care of

Misconception #4: Estate planning is not urgent.

An estate plan is necessary for individuals of every age. A comprehensive estate strategy consists of files to attend to medical care needs in instance you end up being incapacitated, it permits financial responsibilities to be resolved if you are not able to do so in situation of disability– short- or long-term. Most important, these records reveal your wishes regarding who must take care of your youngsters if you are unable to. It might not really feel urgent, however an estate plan is a very useful present to your family.

Misconception #5: If I pass away without a will, the state will obtain my possessions.

There are several reasons to prepare a will, but worry over the state’s taking your household’s inheritance must not be among them. If somebody passes away without a legitimate will, then state law works– and also every state has its own inheritance guidelines. Typically, the spouse and kids of the deceased was initially to inherit. In some states, a surviving spouse and small children share the dead parent’s properties, which could cause a little one’s inheriting a significant portion of his/her moms and dad’s properties. That alone is a great reason to create a Will: you probably don’t want your eight-year-old to acquire one fourth of your checking account.

So, do properties ever before go to the state? Yes, but only when no relatives can be found, which is extremely rare. As long as a family member can be situated, regardless of exactly how distant, the state could not inherit your assets.

Misconception #6: I require just a standard will.

A standard will, such as one that you could complete using the internet resources, is definitely much better compared to no estate strategy. As well as if you never get around to creating even a basic will, the state has a default strategy currently in place for you. Unfortunately, the state’s strategy may be completely opposite to what you want or dream. Plus, all your probate assets will refer public record, and complying with the state’s default plan will likely be slow as well as expensive.

Misconception #7: Married couples don’t require an estate planning.

Of course, if you have been married for a great amount of time and saved reliable and trusting relationships between each other, you may have already discussed the question of distribution the property. Although it seems to you quite simple, you should not skip estate planning altogether. Under regular situations, any kind of collectively held assets will pass to the surviving spouse after the death of the initial partner. Nevertheless, exemptions could easily arise, such as the following:

  • The surviving partner remarries
  • One spouse would like particular residential property to be transferred to their kids, their parents, or a sibling, for example
  • Both spouses pass away simultaneously

As you see, an estate plan is not just a “plan B” – it is a necessity, especially if you have minor children. If you live in Tennessee and own real property (such as a house) or have other property, it is important that you work with an attorney who is knowledgeable about Tenneesee probate law and will advise you on which estate planning documents will work best for you.

McKoon, Williams, Atchley & Stanley, PLLC is a firm that specializes in estate planning, probate, tax controversies, and business transactions. We provide comprehensive estate planning, tax planning, business succession planning, charitable planning and wealth transfer services to you and your families.

Estate Planning by Nick Youngson CC BY-SA 3.0 ImageCreator

Importance Of Buy-Sell Agreements For Your Business

Corporate

In any organization with several owners, there is a great chance that at some point, one or more of those proprietors may not be affiliated with the company, whether by choice, death, bankruptcy, or divorce. For business owners it is necessary to prepare for this ahead of time, to ensure that when one of these situations occur, there is a pre-existing agreement that sets out a legal way to deal with the circumstances. The best means to do this is with a buy-sell agreement.

A buy-sell agreement is a contract between business owners that determines who has a right to purchase a leaving proprietor’s share of business and establishes a fair price for the owner’s stake. The contract might likewise give procedures to fix disagreements when a bulk of the proprietors yet not all of the proprietors make a decision to offer the business. Here are some reasons that you, as an entrepreneur, don’t want to stay in business with other individuals (even household) without a buy-sell contract in place:

1. Ability to choose partners.

if you do not have a buy-sell arrangement in place, your partner’s stake in the business can be transferred to third-parties for many factors: your companion decides to market, declares bankruptcy and is compelled to sell, passes away, or gets divorced and also his partner winds up with some or every one of his shares. In this occasion, new partners will step in and typically they are the people you don’t want to rely on. This may threaten your business’s ability to continue on its current course.

2. Get bigger stake.

If one of your partner decides to quit, you have a method of getting his stake in the business so that he lose the capacity to influence the business after he is no longer entailed. Buy-sell agreements often require that an owner needs to market his stake back to the company or other partners. Also, given that buy-sell contracts supply a system for figuring out a fair rate in the departing partner’s stake, there’s no chance for an ex-partner to extort an unreasonably high sum on his way out.

3. Decrease your estate tax.

The valuation method proposed in a buy-sell agreement serves not only for purposes of an eventual sale, but likewise for estate tax valuation.  Independently possessed services are hard to value. A proprietor’s concept of a company’s well worth at his death could be much less than the IRS’s. Nevertheless, if you have a buy-sell contract in place, as long as such contract is a bona fide arms length transaction, you could utilize the method consisted of in that agreement as evidence as to just how business should be valued. However if no process for valuing the business has actually been put into location, the IRS will certainly be cost-free to establish its very own value.

4. Protection Of Shareholders

It could secure minority shareholders from being cheated out of the proceeds of a sale of business. For example, after the sale of the business, the minority proprietors will certainly be entitled to the exact same cost each share as the bulk owners. This prevents bulk shareholders from conspiring with a purchaser of the business and also drawing out a control premium from the purchaser to the detriment of the minority shareholders. On the other hand, such agreements prevent minority shareholders from vetoing a sale of the business. If it includes a drag along stipulation, then a bulk of proprietors can force the entire business to be sold. Without this, it is possible that even a 1% proprietor can hold up a whole bargain, possibly to extort the other owners for a greater portion of the sales proceeds.

5. Protect Your Family Members

Among the most likely reasons to leave your own business or transfer your stake is disability or, what is worse, fatality. In such cases you will probably not be capable of working out in behalf of your family. Your relatives family will need and should be paid the fair worth for your hard work and efforts you put  into the development of your company. If there is no buy-sell contract in place, the other owners may be reluctant to pay a reasonable quantity for your risk and also are most likely to at least negotiate against your family members. A buy-sell contract ensures in a pre-agreed way that the work you take into your service deals with the people you appreciate a lot of.

A buy-out between co-owners of a business (including redemption of shares by the business entity) is often routine, but it can be the result of a tense, stressful negotiation. McKoon, Williams, Atchley & Stanley, PLLC is experienced in both these situations, and for those clients who wish to plan ahead, we help avoid the disruption that a hostile buy-out negotiation causes by drafting a buy-sell agreement ahead of time. Contact us if you are looking for a lawyer, schedule a consultation. (Please do not include any confidential information in your inquiry.)

 

When A Person Might Need Guardianship?

Family Law

At times it is important to protect an individual’s personal and financial well being if they are not able to protect themselves. This issue particularly arises in families worrying about their incapacitated members and sometimes guardianship might be what you need. This is a legal proceeding in which someone is legally appointed to supervise and provide physical care for a person who is incapable of acting for himself or herself because of age, incapacity or disability. It is essential to understand when guardianship is needed for the person, since not just is guardianship an expensive process, it likewise can be really disruptive to the lives of the whole family.

1. Refuse to comply with the family’s care plan.

For care providers and family members it is essential to work with incapacitated individuals to help them make decisions regarding their treatment and funds. While a family members could have the best objectives concerning, the person might still oppose. If the incapacitated person is in danger of harming himself or his funds and also will not accept help from caregivers or member of the family, after that a guardianship might be necessary.

2. Lack of sufficient estate planning documents.

Under Tennessee regulation, guardianship Courts should look for the least limiting ways necessary to protect incapacitated individuals. Consequently, there is no extreme need in guardianship  if the incapacitated individual effectively carried out a Durable Power of Attorney, and designation of advance healthcare directive.  A Durable Power of Lawyer could provide an agent authority to manage the incapacitated individual’s financial matters. An advance healthcare directive (living will) states your decisions about prolonging life — the use of medical devices such as feeding tubes, measures to restore your heart or breathing, and the use of drugs for pain should you become terminally ill. You can be as specific as you like in defining your wishes for loved ones, which instills confidence that they understand your wishes and relieves their stress about having to make decisions.

Either of the mentioned above estate preparing documents might suffice to settle issues the family members face. The attorneys at McKoon, Williams, Atchley & Stanley, PLLC who are experts in elder law or estate planning could help determine whether the estate planning documents are sufficient to avoid guardianship proceedings.

3. A person is vulnerable to exploitation.

A guardianship could be required when estate preparation documents and relatives could not safeguard incapacitated individuals from monetary exploitation, abuse or self-neglect. For example, a guardianship is needed if the representative authorized to act under the incapacitated person’s Durable Power of Attorney Long is using his power to economically exploit the incapacitated person. An additional typical instance of abuse happens when someone employed to render care or aid to a disabled individual starts to literally abuse or economically make use of the incapacitated person. Frequently, incapacitated individuals in this circumstance choose not to see themselves as targets, as well as rather believe the caregiver is a friend or the only person they can rely on. In these situations, guardianship procedures are essential to shield incapacitated people.

4. Family cannot decide how to take care of an incapacitated person

A guardianship could be significant if the family cannot decide upon the care their member should get. Depending on the circumstances, Guardianship Courts could select a guardian of the person, property or both. Such person then would be obliged to make sure the incapacitated individual is correctly taken care of and also protected from exploitation as well as self-neglect. A guardian of the residential or commercial property is in charge of the incapacitated individual’s finances. The guardian should deal with the incapacitated person and his family to serve the person’s benefits.

 

Where to seek assistance?

Elder care is a growing concern in Chattanooga and the United States today. And caregiving for incapacitated persons can be challenging, but you do not have to face it alone. If your family is struggling to determine how to best care for an incapacitated family member, McKoon, Williams, Atchley & Stanley, PLLC is here to help you.  Contact our attorneys today to make the best decision for your family.

What Is A Living Trust And Why Do You Need One

Family Law, Law

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Writing will is a common practice since you must have a legal document to ensure that your will would be followed after you are gone. However, not many have heard of a living trust and only around 20% of Americans have them. So should you join that 20 percent?

Our professional elder law attorneys from McKoon, Williams, Atchley & Stanley, PLLC, strongly believe that this is an aspect you should understand. Below is the answer to the main question:

What Is Living Trust And Why Do You Need One

A living trust is a written legal document through which your assets are placed right into a trust for your benefit during your lifetime and afterwards transferred to marked beneficiaries at your death by the representative you choose, called a “successor trustee.” A living trust contains the main assets in your estate, such as your house, vehicles, investments, and savings.

1. A Living Trust Prevents Probate

One of the first advantages of a living trust is that it prevents probate which usually suggests a faster distribution of assets to your heirs– just during several weeks compared to months or years with a will. Your your debts will be paid off and your assets will be distributed by your  successor trustee your assets only in accordance with your directions.

What is important, this document allows you to select a guardian for your children in case of death.

2. Saves Money, Time and Nerves

As stated abode, the transfer of assets will not go through probate and thus save money in the long run if someone decides to contest it. Though drafting a living trust will likely cost you more as it is a more complex legal document, it will ease the life of your family members. Here’s how.

Having a living trust could be incredibly helpful if you sooner or later end up being unable to take care of your assets as a result of physical or mental disorder. This is due to the fact that if you’ve made a trust with your partner, she or he has authority over all the trust property.

This attribute of a living trust can be a blessing to family members who are troubled, or rather perhaps overwhelmed, by taking care of a person who has actually been struck by a severe illness or accident. Without the authority conferred in a living trust file, relatives have to generally go to court to obtain lawful authority over the incapacitated individual’s funds– an uncomfortable, public procedure. Generally, the children or the spouse of the person should ask the court to be appointed as that person’s conservator or guardian.

This document also makes possible to avoid any fraud as your incapacity would need to be proven and licensed in writing by several doctors. Once that determination has actually been properly made, the follower trustee has legal authority to take care of all property in the trust, and also to utilize it for your health care, assistance and general well-being. The regulation requires him or her to act truthfully and prudently.

3. A Living Trust Guarantees Personal Privacy

One big difference between a will and a living trust is the degree of privacy. As this document is not revealed, after your death, your estate will certainly be distributed in private. A will, on the contrary, is a public document and all transactions will be public as well.

An additional difference is the handling of out-of-state residential or commercial property you own after your death. With a will, that home will have to go through probate in its own state; a living trust could assist you prevent probate.

With the huge experience of McKoon, Williams, Atchley & Stanley Chattanooga attorneys developing a living trust is simple. The process starts by completing an easy set of questions. We will guide you through every aspect to avoid any potential issues and take care of your and your closest people future. In addition, if you have any doubts or concerns about doctors knowing your wishes about the use of various life-sustaining treatments, you may may prepare and sign some other documents, commonly called an advance healthcare directive (living will) and durable power of attorney.  Do not hesitate to contact us!

How Bankruptcy Works For Business Owners

Bankruptcy Law

Starting your own small business is always difficult and risky. For sure, it deserves respect to entrepreneurs who have courage and particular skills they are using to run the business. Unfortunately, some small companies just don’t have much in the way of assets. Depending on your business situation, there are two options: close and liquidate it or have the opportunity to continue running it. Various factors, such as whether you’re the sole proprietor or if your organization is loosing money, play a role in what will ultimately happen.

When Will You Be Forced To Liquidate Your Business?

In order to keep you from sustaining additional debt, the bankruptcy trustee is likely to force you close your business after you apply for bankruptcy, at least unless the value of your assets and your exempt status are assessed and defined. If the trustee decides that you have nonexempt possessions, they will  insist you sell your business assets and pay off your creditors.

How Bankruptcy Works For Business Owners

If the first option of closing your business is just unacceptable for you, there is a rescue. You might have the ability to keep your business working due to bankruptcy. Below are the three bankruptcy options you have in order to keep your business:

1. Chapter 7 Bankruptcy

If you are the sole owner of your company and also have little or no possessions, Chapter 7 bankruptcy might be the means to go. Since Chapter 7 discharges both your individual as well as business financial debts, you’ll be able to use exceptions to safeguard your organisation and also its assets. You’ll erase your debt and have the ability to continue running your company.

2. Chapter 13 Bankruptcy

Just self-employed entrepreneur could file for Chapter 13 bankruptcy. If you have a significant amount of nonexempt possessions, this choice is the most optimal because you’ll have the ability to reorganize your debts through a repayment plan that is designed to allow you business stay the course.

3. Chapter 11 Bankruptcy Choice

If your business is an LLC, firm or partnership, you will have to submit a Chapter 11 bankruptcy as opposed to a Chapter 13. Similar to a Chapter 13 bankruptcy, Chapter 11 will certainly allow you to make repayments while keeping your business running. The only distinction is that you should submit operating reports once the plan is accepted by the creditors.

4. Transferring Assets

It is essential to follow your lawyer’s suggestions regarding the transfer or sale of assets. Certain transfers, made prior to submitting bankruptcy, could be considered fraudulent; these include moving, eliminating or hiding huge assets right after taking some legal actions. Such transfers might be turned around by the Bankruptcy Court, making the assets you or your business own available to the creditors.

McKoon, Williams, Atchley & Stanley, PLLC has a wide experience of working with business entities, ranging from sole proprietorships and partnerships to corporations and limited liability companies (LLCs). Our clients include existing businesses and startups, as well as founders of closely held companies, professionals, and investors in real estate. Let us assist you in making the best decisions for your business regarding filing for bankruptcy at the Chattanooga Bankruptcy Specialists. Call us today for a free consultation and start the process of getting your business back on track.

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