Publications

ESTATE PLANNING--DON'T GET CAUGHT UNPREPARED

Spring, 2007

"Oh, well . . . I'll take care of it another day." How many of us have thought or said that when confronted with the task of estate planning? Unfortunately, far too many. The problem is that waiting can result in disastrous consequences--for you, your family, and your business. Here at Henningson Snoxell, we strongly recommend that you make sure you have an up-to-date estate plan in place. Equally important, be sure to periodically review your objectives and make appropriate updates to your estate plan.

Estate Planning Goals

Sometimes it helps to break down your planning into manageable goals. Some targets to aim for are:

Enabling your business to continue without you and keeping information about your business operations private;
Avoiding guardianship or conservatorship proceedings in the event of your disability or incapacity;
Preparing for the administration of your estate, and;
Nominating a guardian to care for your minor children.

Wills

A Probate Court will look to your Will to determine a direction from you about who should inherit your assets. If you die without a Will, called "dying intestate," state law will determine how your assets are divided, regardless of your wishes. Business assets are often significant and can represent a large percentage of a business owner's estate. It is of paramount importance to have a Will that addresses the transition of your business assets. More sophisticated plans use revocable living trusts as their centerpiece to avoid probate and/or keep the transition private.

Incapacity-Planning Documents

Powers of Attorney and Health Care Directives name an agent to make decisions regarding your finances and property (Power of Attorney) or health and person (Health Care Directive) during your life if you can't make such decisions for yourself. With people tending to live longer, incapacity is more likely than it used to be. If you become incapacitated and don't have incapacity-planning documents in place, someone would have to petition the Probate Court to be appointed as your guardian or conservator--a potentially lengthy and expensive process. When you draft incapacity-planning documents, remember that it is critical to choose individuals that you trust to carry out your wishes.

Business Succession Planning

A business entity should prepare for the incapacity or death of the business owner by preparing, signing, and funding a buy-sell agreement, a shareholder's agreement, a stock redemption agreement, or similar document. Such a document will determine the procedure for purchasing an individual's shares at death, whether the business entity or other individuals will purchase the shares, how much will be paid for the shares, how the re-purchase will be funded, and who will make management decisions in the event of death or incapacity of a business owner.

If all of this sounds complicated, remember that any estate planning hassle will pale in comparison to the expense, delays, headaches, and chaos that will ensue without appropriate planning. The estate planning attorneys at Henningson & Snoxell would be happy to review your estate plan, or help you begin the planning process. Please contact our estate planning chair, Susan Peterson, at (763) 560-5700 or speterson@hennsnoxlaw.com