Currently Browsing: Blog

Three Ways to Transfer Your Business

Three Ways to Transfer Your Business Let me paint the picture. You are in your 60’s or early 70’s after having working the last 20-30 years building up a successful family business and you are trying to figure out a way to slow down and enjoy some of the fruits of your labor. Some of your family members work in the business, and others do not want to have anything to do with it. In addition, some of your children have the ability to run the business, but you are not quite ready to turn it over to them yet. As you sip on your Corona on the beach in San Diego, you wonder: How do I this? Where do I start? For most business owners, their family business is a huge part of the value of their estate. Yet, so many business owners fail to properly plan for the transfer of their business as part of their estate plan. However, this type of planning is crucial for the success of your business. If you have not already drafted your business succession plan as part of your overall estate plan, then I strongly recommend that you start the process when you get back from the beach in August. With proper planning, you can probably get the documents drafted and in place by the end of 2017 if you start when you get back. But don’t delay, as these business succession plans have a way of working their way back onto the “back burner” when things start to pick up again in late August or early September. Although there are other options, the three most common options are discussed below.  Sell Your Business Outright One way to transfer the business to your children is to sell them your interest, outright, during your life. If you sell it to them, then you will need to sell for fair market value, or else the transfer may be considered a part sale – part gift, which could trigger gift taxes with the IRS. The terms of the sale are also important. For an outright sale, there are essentially two options. First, there can be a cash sale where the children pay the full purchase price at the time of closing, typically with the assistance of bank financing. Second, the buyer pays off a seller carry-back note over time. For either option, it is important that the cash flow of the business be able to support the bank note payment or the seller-carryback note...

Should My College Student Have a Power of Attorney?

Should My College Student Have a Power of Attorney? Recently, my son graduated from high school, and, after a few trips with his friends this summer, he will be heading off to college in the fall. In addition to getting him all up to date with his dental work and eyeglass prescription and purchasing some new clothes and other items for his college dorm room, I am preparing certain legal documents for him in case of an emergency. This blog discusses the legal documents that I recommend that parents obtain for their college-age students before they head off to college. I recommend these documents because, without them, you, as parents, may not have any legal rights for your children over 18 years of age, even if they are covered under your insurance and you are supporting them financially. Recommended Documents for Your College Student The following is a list of the documents that I recommend for college-aged students: Durable General Powers of Attorney. This financial power of attorney gives the student’s parents the authority to sign legal documents on behalf of the student and also gives the parents access to direct transactions for the student’s financial accounts. In general, I recommend that the student sign a durable general power of attorney to cover all financial matters. In addition, in some cases, I also recommend that the student sign the form provided by the financial institution for the student’s accounts. Having this legal authorization in place will give you authorization to assist your student. This is particularly important if your student is studying abroad for a semester or two. Health Care Powers of Attorney and Living Wills. These documents allow you, as the parent, to make medical decisions for your student if he or she cannot make them. In case they are ever needed, make sure that these medical powers of attorney also have mental health care powers within them. Without a health care power of attorney, you may be precluded from making medical decisions for your student in an emergency situation. A Living Will, or a similar document, is the student’s wishes for his or her end of life decisions. HIPAA Forms. HIPAA is the acronym for the Health Insurance Portability and Accountability Act, which provides that your student’s medical records and information is protected from third parties. This is generally a good thing, except when the third party is the parent. This form authorizes medical care providers to release and share medical information about the students with their...

How Long Does Probate Take?

How Long Does Probate Take? After a loved one dies, family members often ask: “How long does probate take?” In general, provided that there are no difficult parties, no difficult assets, and no other complications, a probate case will take approximately 6 to 12 months to administer from start to finish. After the appointment of the personal representative, there are several steps that need to be completed. This blog discusses these specific steps and also discusses the factors that can cause the probate process to be delayed. The Personal Representative’s Duties The following is a brief list of the primary tasks that the personal representative needs to complete: Notice to Heirs and Devisees. Once the personal representative has been appointed, he or she must send notice of the probate case to all of the heirs and devisees. The notice includes the name and address of the personal representative, indicates that the notice is being sent to persons who have or may have an interest in the estate, discloses whether a bond has been filed, and describes the court where papers relating to the estate are on file. Notice of the appointment of a personal representative and notice of the probate of a Will must be mailed within 30 days of the probate of the Will. In an informal probate case, an heir has four months from the receipt of the notice to commence a formal proceeding. Notice to Creditors. Upon appointment, the personal representative should give notice to all creditors of his appointment. The notice to creditors announces the appointment of the personal representative, gives his or her address, and notifies the creditors that, unless they present their claims within four months from the date of first publication, their claims are forever barred. The creditor’s claim period expires four months from date of first publication. In addition to publication of notice, personal notice must be given to known or ascertainable creditors. Notice to the Internal Revenue Service.  The following may need to be filed with the IRS: Form SS-4 (Application for Employer Identification Number). This is commonly filed online. Form 56 (Notice Concerning Fiduciary Relationship). Notice to the Arizona Department of Revenue. The following may be filed with the ADOR: Form 210 ADFC (Assumption of Duties in a Fiduciary Capacity). Note that the Order to Personal Representatives states that notice to the Arizona Department of Revenue must be mailed within 30 days of appointment. Tax Returns. The decedent’s final individual income tax return is due on April 15th of...

« Previous Entries Next Entries »

Business Law
Trusts & Estates
About Me
This web site is designed for general information purposes only. The information presented on this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. [Site Map] [Bookmark Us]

See our profile at and

See full disclaimer
Powered by WordPress | Designed by Elegant Themes