Succession planning where company ownership is concerned can be fairly complicated, but at a simple level every plan is based on two basic issues. You’ve probably thought a lot about who will take over for you; that’s one. But, just as importantly, how can you make sure what you want to happen will happen? Without the right short- and long-term plans in place, it won’t.

Business succession planning focuses on two main concerns. On the one hand, what will happen way down the line when you’re ready to give up the business? And, on the other hand, what will happen to the family business if you pass away tonight?

What is needed is a tiered approach as explored in a recent Forbes article titled “Don’t Let Your Family Business Die With You.” This may require both short-term plans and long-term plans.

Essentially, these are the same kinds of thoughts and approaches you should begin with in all aspects of your life, property and estate. However, there is a special difficulty when it comes to a business. Proper planning has, at all times, one foot in the future and one foot in the present because you never know when the unthinkable could happen.

Do you have a plan in place? If you do, does it take everything into consideration? If you don’t, now is the time to start putting the pieces into place. Even if you have not yet gotten your thoughts together for a long-term plan, you absolutely must have the short-term plan safely in place.

Reference: Forbes (June 11, 2014) “Don’t Let Your Family Business Die With You

“What about the wife?” the social worker asked.

How could we have missed this most basic and vital piece of information? It’s easier than you might think. The sister didn’t get along with the wife and apparently wasn’t moved to tell us of her existence. The social worker had been out sick, and his replacement assumed that we knew. And we had a concerned sibling at the bedside who fulfilled our mental checkbox for who makes an acceptable surrogate decision-maker.

While doctors are dealing with the medical issues during end-of-life situations, they have a harder time thinking about the personal wishes of their patients. It’s best to have a plan in place and someone to communicate those wishes to the doctor in charge.

For the thoughts and an appreciation for these end-of-life difficulties, you might want to read a recent article in The New York Times titled “Who Can Speak for the Patient?”

Doctors have an incredibly difficult role to play at a very important juncture in the lives of a patient and their family. This “role” is above and beyond their job of ensuring for medical care. The role of the doctor is to relay the medical information and difficult prognosis to decision-makers, but that is not always clear to the doctors or the hospital. In the original article, a very common family situation became the backdrop for a decision about whether to continue life-sustaining care, and the wrong person was almost relied upon for innocent and understandable reasons.

The takeaway from this instructive article should be an awareness of how vital it is to maintain readily available records, so it is clear who is responsible when a patient cannot make their own choices and what kind of choices those might be. In this case, once the wife was properly identified, then she was able to make the right decisions. However, precious time is lost and family strife can build when it is not clear who has authority. These are things we all have to think about, and it is necessary to think them through before it is too late.

Reference:  The New York Times (June 19, 2014) “Who Can Speak for the Patient?”

From checking Unclaimed Property to setting up automatic bill payments, here are some simple tips each of us can use to keep our finances organized this year.

Although you may not live in Missouri and it may not be “spring cleaning” season, Missouri State Treasurer Clint Zweifel offered sound financial advice in a column from The South County Mail entitled”Spring cleaning? Don’t forget your finances.” Mr. Zweifel has some “simple tips” on estate planning and taking care of money that you can do any time of the year.

Review and eliminate unnecessary expenses. Keep track of your subscriptions and automatic payments. If you have not watched your movie channels in months, cancel the subscription and save some money.

Set up an automatic payment to your savings account. Try to save money when you can, whether it is an emergency fund or for an upcoming purchase. Make it easier to pay yourself first, and over time it will become just another part of your monthly budget. You should also set up automatic payments. It isa good way to ensure that you are always up to date on your payments and avoid late fees.

Make sure you have appropriate insurance. Insurance is a critical safety net in the event of an emergency. Take some time to look through all of your plans and make sure you have the coverage that best matches your needs.

Finally, create or update your estate plan. The article warns that this will not earn you extra money, but it is crucial in planning for your financial future. Make sure your estate plan is up to date and that it includes all relevant assets. Talk to your estate planning attorney about a revocable living trust and/or beneficiary designations to avoid probate.

There can be some complicated questions when it comes to finances and taxes. Speak with an estate planning attorney and make sure that you do your “spring cleaning” even in the middle of summer!

Resource: South County Mail [Rogersville, Missouri] (April 3, 2014) “Spring cleaning? Don’t forget your finances“

Over the past few years pieces have not been selling as well as expected or not selling at all. Often the amount they are appraised for, and thus the amount the IRS views them as valuing, is not close to the amount that they garner at auction. 

Have you ever watched the TV show Pawn Stars? The same process plays out on the show over and over again. Someone will bring in a rare item, the pawn store owner will call in an expert to appraise the item, the appraiser will give an approximate value, and then the store owner will offer to pay half the appraised value of the item.

Obviously, a pawn shop is not going to pay full price for anything. However, the spiel that the store owner often gives contains lessons. He explains to the customer that the appraisal value is how much the item might get at auction, but that it has to be the right auction with the right buyer and that in this economy nothing is going at auction for the full appraisal value.

This has implications for estate planning, too. Why? For tax purposes the IRS considers assets worth their appraisal value and not the amount they garner at auction. Thus, if you have a piece of art appraised at $5 million that your heirs can only sell for $3 million at auction, then your heirs might have to make up the difference from other assets when it comes time to pay the IRS.

A recent Wills, Trusts & Estates Prof. Blog article, titled “Rare Collectibles May Not be the Best Estate Plan,” illustrates the point with the case of a stamp collection appraised at $20 million that sold for less than half that amount.

Before you leave your collection to your heirs, it is important to consider how they will pay taxes on the collection. Even if the collection is sold to pay the taxes, the proceeds from the sale may not be enough to pay the tax bills.

Reference:  Wills, Trusts & Estates Prof. Blog (June 24, 2014) “Rare Collectibles May Not be the Best Estate Plan”

New studies are providing more current cost estimates. “What we found was shocking,” Mandell said. “This is a huge hit on families.”

The costs to care for a child with special needs is on the rise, as reported in a new study in the medical journal JAMA Pediatric. The study found that the total lifetime cost of supporting an individual with an ASD is $1.4 million in the U.S.—with an added intellectual disability, the total rises to $2.4 million. Reuters recently reported on this study and its findings in an article titled “Raising an Autistic Child: Coping With the Costs.“

These costs typically include an ongoing mix of special education programs, medical care, and lost wages as many parents of autistic children reduce their work hours or even quit their jobs to help their child full-time. The organization Autism Speaks estimates that it now takes roughly $60,000 annually to support someone with an ASD. Such costs can be so prohibitive that many affected families will move to states that offer a better collection of services.

The original article advises parents not to automatically think they must drop out of the workforce to manage their child’s case full-time. It is the natural human instinct to want to do so. No one knows a child and his or her needs like a parent, and navigating the morass of city, state and federal services can be a full-time job. However, if a parent drops out of the workforce, just as out-of-pocket expenses start to mount up, it can become very challenging financially.

The article urges families to take a long-term view of caregiving. In some situations it might be more advantageous for mom to stay in the workforce, and then hire additional support to provide case-management services. An attorney well-versed in special needs issues can be an indispensable aid in this area.

Reference:  Reuters (June 24, 2014)“Raising an Autistic Child: Coping With the Costs