You Might Need a Revocable or Irrevocable Trust

Depending on the nature of the property you own and how it’s titled, you may want to ask your lawyer to create a trust that will help you meet all your estate planning needs. To prepare for such an appointment, be sure to take along two lists – one noting all the properties you own and the other indicating the beneficiaries you want to help by naming them in the trust.

Your attorney will need to ask some general questions to help you decide which one of these trusts is best suited to your current financial situation.

Before describing some of the precise differences between revocable and irrevocable trusts, this article will note some of the general reasons why they’re often desirable.

What general benefits do trusts often confer on estate planning clients?

  • They can help maximize family privacy. Most property that passes to beneficiaries under trusts is never publicly disclosed — except to the extent that certain taxes may be owed on gifts given or received. Obviously, when property passes through probate, members of the public can learn about your estate by reviewing court records. Therefore, trusts offer greater privacy;
  • Trusts can help protect your assets from outside creditors. While this goal can be achieved if you’re not attempting to defraud others when you have the trust created, you must be prepared to answer questions if creditors sue you. If you want to put assets in a trust in hopes of getting around specific Medicaid rules and regulations, you must let your lawyer explain how the government prevents fraud in this legal area;
  • They can provide specific tax advantages. For example, since property or assets placed in an irrevocable trust account are considered owned by the trust and not by the grantor who had it created, those assets will not be treated as part of your estate (for tax purposes) at the time you pass away. (However, any assets in a revocable trust when you die will be taxed as part of your overall estate);
  • Trusts can provide added financial security to a dependent disabled person. In order to qualify for some Social Security benefits, recipients must meet certain financial criteria. If they own too much property or are too wealthy, they won’t be qualified to obtain key benefits. One legal way to get around this problem is to place assets in an irrevocable trust and name the disabled person as a beneficiary. Your Houston estate planning attorney can explain this process in greater detail. Aging parents and others often set up trust accounts like this to be sure seriously disabled family members will have enough to live on in the future – long after others have passed on;
  • At the time of a divorce, most trust funds should remain protected. However, you cannot place funds in a trust prior to a divorce to try and defeat your spouse’s community property rights;
  • Properly created trusts have long helped grantors provide for the basic needs of their loved ones.

It’s important to note that all trusts are categorized as either “testamentary” or “living” (inter vivos) trusts. The latter type become viable during the grantor’s lifetime – while testamentary trusts – which are directly linked to your Will — don’t go into effect until you’ve passed away.

What are some specific benefits of revocable trusts?

  • They can provide ongoing control over all trust assets. If you create a revocable trust, you can decide if you want to serve as the trustee and move certain assets in and out of the trust when you choose, depending on the terms you created for the trust;
  • You can change the terms of the trust when you choose. This might mean picking a new trustee or altering the list of beneficiaries;
  • They are relatively easy to handle at tax time. As the grantor (or creator) of this trust, you can simply declare your earnings from the trust in your personal tax return.

What are some specific benefits of irrevocable trusts?

  • The trust assets are usually considered safe from the reach of outside creditors. This will prove true if you didn’t have the trust created to defraud others. Courts will review all aspects of the trust’s initial drafting when checking to be sure it wasn’t set it up to defeat known debts;
  • As noted above, disabled people needing to receive special Social Security benefits can often receive critical added funds from properly drafted irrevocable trusts;
  • For tax purposes, the IRS and others don’t usually view these trust assets as being owned by the grantor at the time of his/her death. Therefore, any assets in the trust at the time the grantor dies will not be added to assets outside the trust when calculating any estate taxes that may be due.

Always keep in mind that the laws controlling the creation of trusts change periodically. Be sure to always confer with your Houston estate planning lawyer who keeps up with such changes before ever trying to create or modify a trust. Attorneys also stay abreast of all new state probate laws that may affect clients’ estate plans.

Should you need any help with creating or updating a trust account, please feel free to contact one of our Murray Lobb attorneys. We’re ready to provide the legal advice you’ll need to fully protect your assets in the future. Our firm can also help you revise your estate plan as your family continues to grow and new investments are added to your portfolio.

What Kinds of Property Can Be Placed in a Revocable Living Trust?

A revocable living trust is an estate planning document that allows its trustee to actively control many properties and possessions during an entire lifetime. Both new and older possessions can be freely moved in and out of this trust and left to various beneficiaries. Once the trustee passes away, all the property still held by the trust can immediately pass to the beneficiaries and avoid incurring unnecessary probate fees.

Since real estate, business interests and personal possessions can be quite varied, it’s wise to discuss their individual characteristics with your lawyer before placing them in this type of trust. This especially holds true if you plan on buying and selling some of your possessions on a regular basis. In some cases, it may be easiest to allow a few less expensive properties to pass through probate when their value will help minimize any fees.

Here’s an overview of the type of personal possessions, real estate, business accounts and other items that you may want to place in your revocable living trust (RLT).

Types of property often placed in a revocable living trust

  • Real estate and houses. You can place these in a revocable trust, even if they’re encumbered by mortgages. Of course, any debt still owing on the property will pass to the beneficiary;
  • Legal interests you own in most small businesses. You’ll need to give this very careful thought since you’ll want to be sure your beneficiaries can capably run the business and handle other required tasks. Also, you and your Houston estate planning attorney need to carefully read all the small print in your business contracts to be sure they don’t specifically forbid the transfer of your ownership interests into a trust. Other formalities may also become pertinent. For example, if you’re a partner in a group governed by a partnership ownership certificate, that document may have to be changed to indicate your trust is the legal owner of your share in the business. Somewhat similar issues may arise if you own shares in certain types of corporations;
  • Stocks, bonds, bank and security accounts. While it can prove useful (if allowed by the terms of each account) to place all of these in your revocable living trust, it may be simpler to just a name a TOD (transfer on death) beneficiary for one or more of these accounts. Ownership can then pass directly to your beneficiaries as soon as they produce legal proof of your death;
  • Copyrights, trademarks, royalties and patents. These can all be placed in your LRT (living revocable trust). After you pass away, the rights – and limitations – that governed these interests will pass on to your beneficiaries;
  • Gold, silver and other precious metals. Before deciding whether it’s wise to place these in your trust, be sure to get them accurately appraised;
  • Prized pieces of artwork, antiques (and less expensive) furniture. Be sure that all these unique items are properly insured before placing them in your trust;
  • Your collectibles. These often include coins, stamps and other unique items you may have spent a lifetime collecting. (Be sure all these items are also properly appraised and insured).

Should you place your life insurance policy into your revocable trust?

If you’re considering this move because you’re trying to protect the policy proceeds from having to go through probate, be aware that such proceeds automatically bypass probate and go straight to your named beneficiaries. However, if the only beneficiary of your policy may still be a child should you suddenly pass away, you may want to put the life insurance policy into your trust and name the living trust as the beneficiary. Your lawyer can then make sure that the trust names an adult to manage the proceeds of the life insurance policy for the specifically named child until s/he reaches adulthood.

How should 401(k), 403(b), IRA and qualified annuity accounts be handled?

You can create various tax problems for yourself by trying to transfer these into your LRT. Ask your lawyer if it would be better to just change the beneficiaries named for these accounts.

Should you place ownership of any vehicles in your trust?

If you use them regularly, this is often not practical. However, if you own one or more antique autos, you may want to talk with your attorney about whether it’s fully beneficial to hold title to them in your trust – or if there’s a better way to keep them out of the probate process.

Can oil and gas mineral rights be placed in a revocable living trust?

What you can do with these depends on the precise nature of the rights you hold. Ask your Houston business law attorney if you should create an assignment to these rights or try to formally obtain a new deed before transferring them into your revocable living trust.

Please contact us and allow one of our Murray Lobb attorneys to help you draw up any living revocable trusts you may need to help protect your personal property and possessions.

Should My New Texas Business Be Formed as an “S” Corp or an LLC?

While deciding which business structure will best serve your needs, always consider several key factors. For example, look at how many employees you plan on hiring and how much time you want to spend managing the company. You should also make sure you’re fully protecting your personal assets against future lawsuits and not incurring any excess taxes.

One excellent way to choose the best structure for your company is to meet with your Houston business law attorney. The two of you can discuss all that you might gain (or lose) by starting your company as either an LLC (limited liability company) or an “S” corporation.

Before noting some of the basic steps involved with forming an LLC and an “S” corporation, here’s a brief overview of the unique offerings and drawbacks of both structures.

What are some chief advantages and drawbacks of starting an LLC?

Depending on the size of your business and the types of goods or services you’re selling, you may prefer an LLC for the following reasons.

  • It offers a less formal structure. An “LLC” is also often easier to manage than an “S” corporation, especially when you have few employees. And you’ll never need to have any board meetings to tackle problems tied to issuing stock certificates;
  • You can readily change this business structure (once all proper paperwork is filed). If

you’re running an “S’ corporation, you’ll first have to arrange a formal board meeting before trying to change the business structure);

  • All members of an “LLC” do not have to be permanent residents or U. S. citizens;
  • You can more easily divide up who handles most of the daily work – while allowing others to just be investors. You can also simply divide up the profits based on each person’s initial investment and daily work contributions;
  • Disadvantages of an “LLC” compared to an “S” corporation. These can include having all the company profits subjected to self-employment taxes. Your growth may be limited since your business cannot issue any stock shares. Always ask your Houston business law attorney about any other potential disadvantages that may apply to your unique situation.

Why do some entrepreneurs prefer forming “S” corporations – despite the limitations?

  • Formality is viewed more favorably by some. Outside businesses often prefer interacting with companies that employ a more formal corporate structure;
  • You can often use this structure to avoid double taxation of income;
  • Profits are passed on to the shareholders (by way of their paid dividends). Therefore, the company does not have to pay taxes on those profits;
  • Possible drawbacks. All shareholders must be permanent residents or U.S. citizens. There can be no more than 100 shareholders. Added state filing fees may apply. Also, the IRS

tends to monitor “S” corporations very closely since some people try to improperly avoid certain taxes by wrongfully using this business structure.

What are some basic issues that must be addressed while forming an “LLC” in Texas?

  • Membership. You’ll need to decide how many owners or members you’ll have and if they’ll share all the managerial duties;
  • Naming your business. You must choose a unique name to avoid confusion with already existing companies;
  • File all required forms. You’ll need to start with a certificate of formation (Form 205) that must be filed with the Texas Secretary of State’s Office;
  • Registered agent. You must name a registered agent who can accept the service of process on behalf of your company;
  • You’ll need to create an operating agreement. It’s usually best to ask your Houston business law attorney to draft this document for you after you’ve

discussed the precise nature of your new business;

  • Fully satisfy all state and federal paperwork requirements;
  • Obtain all required state and local business licenses that may be required for your industry.

(Note: Some of these same steps may also be required while forming an “S” corporation below, regardless of whether they’re listed).

Here’s a brief review of key issues involved in starting an “S” corporation in Texas

  • The drafting of Articles of Incorporation. These must be filed with the Texas Secretary of State’s Office;
  • Stock certificates must be issued to all initial shareholders;
  • All applicable business licenses and certificates must be obtained in a timely manner;
  • You’ll need to file Form 2553 with the Internal Revenue Service. (Your lawyer can first check to be sure you meet all the qualifying terms for creating an “S” corporation).

Please feel free to contact one of our Murray Lobb lawyers so we can answer your questions about each of these business structures. We can also help you draft all the documents you’ll need to transact business throughout the year.

Why You Need to Create a Business Succession Plan NOW

Why You Need to Create a Business Succession Plan Now

Even when all owners of a company plan to work until the very end of their lives, there’s still a need for a viable business succession plan. After all, anyone can become totally or partially disabled as a result of a serious car accident or die of a deadly disease on almost any day.

When business owners hide from this reality, they often create havoc for all surviving partners or family members. Instead, it’s better to move forward at a calmer time to carefully address these types of possible future events.

Your Houston business law and estate planning attorney can help you decide on the best way to either pass your business on to others — or liquidate all the assets to meet your own needs and those of your survivors.

General questions you must answer yourself about any succession plan

  • What is the current market value of this business and all its assets?
  • Who is the best possible buyer? Do I prefer to sell the business to a co-owner, family member, employee or a third party?
  • Am I more likely to sell the business sooner rather than later? Am I interested in selling the company now due to health, retirement or other reasons?
  • Is this business tied to its current location? If not, would it be reasonably simple for the business to be moved elsewhere and successfully run by someone there?
  • What preferences do I have about how the sale should be financed? Am I willing to personally finance the loan? If so, what type of collateral should I require?
  • Which business advisors should I consult with while securing all the required contracts and other paperwork? Besides business and tax lawyers, do the specific assets of my company require me to consult with real estate agents, insurance and business brokers, bankers and financial advisors?

It’s often wise to start this process by locating and reviewing all your current business contracts and deeds. Next, give some thought to your company’s most productive and respected employees. Then, carefully determine the current market value of every business asset. Finally, schedule confidential, preliminary talks with any co-owners, family members who work for you, other key employees and perhaps one or two other potential buyers of your company.

Once these initial tasks have been handled – or while you’re completing them – it’s wise to meet with your Houston business law attorney.

Advantages and disadvantages of selling to different parties

Unless you’re the sole owner of the company and simply want to liquidate all the business assets and not sell (or transfer) the company to others, you must carefully evaluate each potential buyer and decide which one is best qualified to run the company in your absence.

  1. One or more family members. In most instances, it’s usually best to sell to only one family member, preferably one who is already involved in the business and respected by your employees. Ask your attorney about the best ways to prevent future challenges to any decision you make. One approach might involve drafting a buy-sell agreement that clearly states who is going to be running the company — and asks all others who currently work there (or own shares) — to sell their shares to the person you’ve named as your successor. This approach often helps minimize future family disagreements.

When selling a business to a family member, you may want to execute a self-canceling installment note (SCIN). Your attorney can explain why that may be useful;

  1. A key employee who is highly knowledgeable and well liked by other workers. The most common drawback to selling to a key employee is that the person may not be able to give you a large down payment in cash. Be prepared to execute a buy-sell agreement that clearly lists all the valuable collateral for any loan you may be willing to finance. You can also suggest that this employee try to obtain an SBA (Small Business Administration) or bank acquisition loan that will provide you with up to 70% or more of the purchase price upfront;
  2. You can sell your shares to your co-owners. Be sure to clearly indicate the sale’s price and all purchase terms;
  3. An outside third-party or competitor. Be very careful when selling to this type of buyer if you’re financially depending on the person to keep running the company. Due diligence is critical when evaluating every potential buyer.

Since this article only provides a broad overview of the types of issues involved when drafting a business succession plan, you’ll need to obtain competent legal help to handle this entire process. Should you already have some type of succession plan, we can help you decide if it’s time to update it.

All our Murray Lobb attorneys have the necessary experience to help you create a business succession plan that’s specifically tailored to your company’s unique needs. We look forward to helping you draft all the contracts and other documents you’ll need while selling your business.

 

Why Most Adults Under Age 35 Needs an Estate Plan

Many young adults assume they won’t need a simple or comprehensive estate plan until they’ve created or inherited a sizeable amount of wealth. However, all adults, especially those who are married or have children, need estate plans to protect their legal interests.

After all, none of us know when we may suddenly become the victim of a severe pedestrian or auto accident – or receive a devastating medical diagnosis. When you have a basic Will, it can greatly simplify matters for your loved ones if you become too incapacitated to manage your own finances or even pass away.

The following information helps explain why no one should want to continue being one of the approximately 60% of American adults who are without a Will or estate plan.

While it may be a bit uncomfortable requesting documents that directly address your own possible incapacitation or death – the peace of mind you and your loved ones will gain always makes the effort worth it.

Key reasons why all younger adults can benefit from a Will or comprehensive estate plan

  • They each allow you to specifically name the beneficiaries you want to receive your real property and investment accounts. When you fail to create a Will, the state of Texas will apply its laws of intestacy to decide who will inherit everything you own. Even if you’ve only had time to pay into a 401k or other investment account for a few years, chances are you also own a car and a few other valuable possessions. Creating an estate plan lets you decide who will receive your assets – although community property and other laws will also come into play if you’re married;
  • You can designate a guardian for any minor children. There may be good reasons why your child shouldn’t go live with certain relatives if you become critically ill (or too disabled) to care for the child. A Will lets you designate one or more people to shoulder this responsibility, along with one or two back-up guardians.
  • You can designate someone else to speak for you in a medical Advanced Directive. This type of estate planning document lets a person you trust choose the specific medical care you wish to receive if you become seriously ill and can’t make decisions for yourself;
  • Your Houston estate planning attorney can provide you with valuable legal advice on how to protect your wealth against excessive taxes as your estate begins to grow. Even if you hold a degree in asset or wealth management, you’ll always need to make sure you’re using tax-efficient wealth transfers to others that fully comply with all recent changes in IRS laws and regulations. You may also want to have a trust account created to help you annually transfer wealth to specific individuals or charitable organizations;
  • Creating an estate plan helps you develop meaningful savings goals as you begin to plan for your eventual retirement. If you begin funding your retirement in your early 20s and 30s, you’ll increase the chances of being able to choose the date when you’ll retire or reduce your workload. Should you marry, having an estate plan can help you and your spouse make more informed choices about assuming a new mortgage, having children, setting aside funds to help pay for your children’s education — and possibly even one day funding a charitable trust or family foundation.

Perhaps the best part of creating an estate plan when you’re very young is that you’ll be able to reflect on how your legal documents are helping you “grow your income.” And you’ll always be able to change and update your financial goals when new life circumstances develop.

While many younger people request an entire set of estate planning documents, others are more comfortable just requesting a Will that will cover all their current, limited possessions.

Please feel free to contact one of our Murray Lobb attorneys so we can provide you with the estate planning advice you currently need. We’ll always be available to answer any questions you have and update your legal paperwork as your life changes and moves forward.

Legal Documents Often Needed by Caregivers

Careful planning is required once you agree to act as the legal caregiver of a family member or close friend. Always make sure the person making this request promptly provides you with copies of properly executed legal documents that will help you address their most critical needs on a timely basis.

Fortunately, your Houston estate planning attorney can help you decide which legal documents may be required by the person needing care. These documents can help you make such crucial decisions as where the person needing care may want to live — and choose the types of medical care they’re willing to receive from specific healthcare providers.

Depending on if you’re personally named in all the required documents, you may also need to handle burial needs – and make sure that all money and possessions are properly transferred to the correct beneficiaries once your loved one or ailing friend passes away.

Here’s a brief overview of the types of legal documents you’ll need the person you’ll be taking care of to obtain from a lawyer.

Key documents to consult while taking care of an ailing friend or family member

  • Power of Attorney. While many older or ailing adults can still often make sound decisions for themselves – they may want you to stand ready to step in and handle key business transactions for them with various companies should they become too ill to manage these matters on a temporary basis;
  • Durable Power of Attorney for Healthcare. This may also be called an Advance Directive for Healthcare and other similar terms. Its purpose is to clearly indicate the types of medical care the named party is open to receiving – and when certain types of life-extending treatments should be discontinued when the party named in the documents is suffering from a terminal or irreversible condition. The document also clearly provides authority for the person named as the Medical Power of Attorney to have full access to all medical records required while making decisions in coordination with doctors and other healthcare providers;
  • A Living Will. This document is different than an Advance Directive because it states how the person needing medical treatment wants their medical care to be handled – as opposed to the Advance Directive which states how another person (the agent) should handle the ill person’s medical treatment needs when that person is unable to do so. This type of Will also often addresses whether life support procedures should be provided under specific circumstances;
  • A Basic Will. This sets forth the name of the executor who’s been chosen to manage the ill person’s estate once they pass away — so the chosen beneficiaries will receive all the designated wealth and possessions. Hopefully, the person you’re helping will remember to ask their lawyer if they need to create one or more trust accounts so that all or part of the estate can be easily transferred without going through the probate process.

Be sure the person you’ll be taking care of informs their lawyer about any unusual or special circumstances that may need to be addressed in all the documents named above.

You may also want to obtain a document sometimes referred to as an Appointment of Agent to Control Disposition of Remains. This will allow the older or disabled person needing your care to state who will handle their remains once a funeral home has prepared them for burial (or placement in an urn). Many people today who’ve chosen to be cremated obtain this form, so they can state the location of a specific cemetery or columbarium where their remains will be interred.

Please feel free to have the person who’s asked you to act as caregiver to contact one of our Murray Lobb attorneys so we can help prepare all of these important legal documents. We are always available to respond to any questions you may have regarding any of these documents and the entire estate planning and probate process.

General Steps to Take While Preparing to Sell Your Business

Selling your company at the proper time can provide you with greater freedom and added income as you pursue other business or personal goals. Whether you’re a sole proprietor who can move forward alone — or someone who must confer with business partners or a corporate board of directors, there are basic steps you can follow that can help streamline the process.

As you further contemplate this move, give serious thought to timing and be ready to explain why you’re making specific choices to prospective buyers; They’re sure to ask why you’re selling your company now. Also think about whether you should hire a professional business broker, especially if you don’t want to manage the sale on your own and are concerned about locating the best potential buyers.

Each of these key topics are discussed further below.

Are you prepared to tell qualified buyers why you want to sell your business now?

If sales are dropping or you’re currently losing a sizable portion of your customer base, you may want to postpone the sale for six months or a year. During that time, you may be able to rebuild the company and make it more viable.

Of course, business owners often want to sell their companies for many other reasons, including the following ones.

  • They’re eager to retire and simplify their lives – letting go of business activities.
  • They have current disputes with partners, co-owners or corporate board members, so they would just like to move on. Obviously, you’ll need to reference these issues in a very tactful yet honest manner if you have no other reasons for selling.
  • The sole owner (or another party) is facing a serious illness or impending death.
  • You want to keep working — but in a less stressful capacity. Be ready to share this in as upbeat a manner as possible – while being open and honest about the pressures of running the business.
  • You’ve developed a keen interest in a different business field and are eager to get your new venture up and running.

These are just a few of the reasons why people often choose to sell a business. Whatever you decide to tell prospective buyers – be as honest as possible since a failure to disclose current problems is unethical and could damage your reputation in the community.

If your business is losing value, be prepared to tell potential buyers (after carefully qualifying them) how they might reverse that trend. You can also explain why they may still want to simply purchase all your valuable vehicles and equipment.

Decide whether you should sell the business yourself – or hire other professionals

  • Legal advice can prove crucial. You’ll also need help drafting the various legal contracts and documents required to support a sale.
  • You’ll want to work closely with your accountant. All your business and tax records must be fully updated.
  • A business appraiser can prove very helpful. This individual can help you determine a fair asking price for your company.
  • Even a brief consultation with a business broker can benefit you. This person knows how to locate a healthy pool of potential buyers. This process can prove extra challenging if you do not want to run any public advertisements.

Be prepared to locate or create various documents while trying to complete a viable sale

You must be prepared to share all your basic financial statements and records for the past three or four years. It’s also crucial to create a comprehensive list of all your company equipment and fixed assets tied to your business accounts. (Be prepared to spend the necessary fees to repair all valuable vehicles, equipment and other goods involved with the final sale).

It’s also important to create a detailed list of your ongoing sales transactions and the names of the companies that currently provide all your company’s most critical supplies. Copies of all current contracts and leases should also be made available so qualified buyers can review them.

Be prepared to carefully decide which buyers may be the most dependable ones

Many business owners prefer to sell their companies to close family members, trustworthy employees, friends or current customers. You’ll need to choose wisely, especially since this type of sale often takes from six months to two years. 

Of course, never disclose private information about your business to potential buyers until after they’ve each agreed to sign non-disclosure agreements and qualified for financing plans that meet your requirements.  Be prepared to negotiate carefully – or ask your attorney to handle the negotiations on your behalf.

If you’re ready to sell a business – or just want to learn more about all the various legal and practical steps referenced above, please contact one of our Murray Lobb attorneys. We look forward to answering all your questions.

Key Traits New Business Partners Must Readily Offer

Although only 20% of new businesses fail during their first year, roughly half of them cease operations during their first five years. Frequently, the biggest problems develop because the founders failed to choose the best group of partners available to start the company.

Each potential business partner’s personality traits, ethical values, passion and proven skills must be carefully evaluated. Only then can everyone work hard together to define and establish high performance standards while carefully marketing the company’s goods and services to the public.

Here’s a general overview of the partner skills and traits that some business experts believe can provide a new company with a strong chance to succeed for many years to come.

Top skills and traits your partners must have and be willing to share with each other

  1. Trustworthiness, discretion and moral integrity. In addition to partners whose references say they’re definitely trustworthy– you also need people who have an innate need to treat others fairly and want to act as good role models for ethical business behavior;
  2. Keen intelligence and a proven track record of success. Ask all potential partners about their past business successes and failures. Find out if they have truly learned from all past experiences. The crucible of the workplace often provides the best measure of a potential partner’s ability to succeed in a new business venture. Look for highly intelligent partners who can readily respect other people’s creativity — while still bringing their own fresh, original ideas to the table;
  3. Able to maintain a consistently positive, “can do” attitude. Nothing can bring a business to its knees quicker than one or two partners who keep forecasting doom. Be sure each person will remain actively involved in all key company decisions and “go the extra mile” without being asked to do so on many occasions;
  4. Able to display strong, supportive communication skills. All companies need strong communicators who can create proper standards for respectfully interacting with others. These standards must apply to all in-person meetings, phone conversations, the exchange of emails and the use of social media. Each partner must also clearly communicate his or her support for others within the company;
  5. Can offer unique skills that help balance out those offered by the other partners. In addition to someone who can handle complex accounting matters, you’ll also need partners who are strong planners, innovative geniuses, marketing wizards and product (and service) development experts. You’ll also need at least one partner who maintains strong connections to industry experts who can provide your company with timely advice, crucial consultants and other contacts over the years;
  6. Can remain open-minded and is willing to constructively resolve conflicts with others. Always learn all you can about each potential new partner’s openness to the ideas of others and ability to compromise on matters. Also try to evaluate the person’s mature ability to acknowledge personal mistakes – and learn from them. You don’t need any partners who constantly try and prove themselves “right” about everything;
  7. Has the ability to handle different levels of risk and uncertainty. This may be the hardest trait of all to discern – but it’s well worth finding out if someone can remain fully productive – even when unexpected business challenges arise. Always ask about past business difficulties and how the partner candidate personally responded to them. Resilience in the face of change is a key trait of all successful business partners.

Once you’ve selected all your partners, you’ll need to meet with your Houston business lawyer to draw up a partnership agreement that clearly addresses such matters as each person’s roles and responsibilities, how (and when) everyone will be compensated – and how the company must respond when anyone chooses to leave the partnership.

Please contact our Murray Lobb office so we can provide you with the guidance you’ll need when forming any new business. Our firm’s lengthy experience working with professionals in numerous fields allows us to provide you with the help you’ll need.

Creative Planning for Your Senior Years Should Begin Now

Creative Planning for Your Senior Years Should Begin Now

Just as most younger people make detailed plans before entering college or starting their careers, older Americans must also carefully plan how they want to live out the last decades of their lives. If you’ll start this process early, you’re much more likely to have many positive options and choices available.

Yet before older Americans or “seniors” start thinking about vacations and other pleasure pursuits – it’s crucial to first address such basic needs as finances, housing and medical care. A good way to start this process is by asking yourself each of the following questions.

  • What family, financial and legal resources do I currently have?
  • When – and in what order — should I begin drawing upon those resources in the most efficient manner?
  • If I’m short on all or most resources – how can I immediately begin creating a supportive community of friends, relatives and others to help me?

Your financial and legal resources require immediate planning and regular oversight

You’ll always need to know more than just how much money you have and how quickly you can liquidate it in case of an emergency. Although it’s important to be able to access large amounts of money should you or your spouse require immediate medical care that isn’t readily covered by insurance, there are other more critical issues you should address first.

Stated simply, everyone needs to secure Medical Power of Attorney documents, a Will and other supporting documents. You can easily acquire this paperwork by meeting with your Houston estate planning lawyer long before you reach your senior years. This will help you obtain the best medical care available – in keeping with your preferences.  You can also inquire about other documents that can grant trusted individuals the right to handle your finances (especially if you’re single without adult children) if you become temporarily incapacitated.

Given how many older Americans now live alone, these matters should never be postponed. As of 2010, about 12% of women between the ages of 80 and 84 were unmarried and childless. By 2018, some experts predict that about 16% of women in that age group will fit that description.

Of course, many men may also have similar needs since the average woman only outlives the average male by a few years.

Once you and your attorney have created all this legal paperwork, be sure to give copies to trusted relatives or friends so that they can make sure you obtain the care you need right when you need it the most.

If you’re age sixty and single (or even if married) – start proactively deciding where you’ll live Afraid to face the reality of eventual death, too many people refuse to move into proper housing before their health seriously deteriorates. When this happens, helpful family members or friends are often greatly inconvenienced by your avoidable tardiness.

Give serious thought to moving into a place now that offers different levels of care. Otherwise, if a sudden emergency develops, you might not wind up where you want to be. Try looking for unique living arrangements where seniors can blend in with others of all ages. Places like Hope Meadows are often a blessing to many.

Think positive if you have little money – consider part-time work – and keep socializing

Stay active pursuing activities that are meaningful, useful and fun. As you get to know others better, you may want to suggest becoming part of each other’s support network. Friendships with others of all ages can prove very beneficial to everyone involved.

If you currently have a tech-savvy friend or family member — and want to live at home as long as possible — be sure to check out the newest “apps” that can help keep you and your financial world safe.

Always be kind to yourself. If current media articles make you feel that you made poor choices in the past regarding marriage and children, keep in mind that married couples (and older singles) with children don’t always “have it made” regarding help while growing older. Many of these people have adult children who: (1) live far away, (2) are estranged from them, (3) are coping with serious addictions – or are (4) barely staying afloat in their own busy family and work lives.

Finally, since so many entrepreneurs are now rushing into the “longevity market,” you must make sure you’re interacting with reputable people and not scam artists. Just because someone is financially “bonded” to do their work, doesn’t mean they’ll do what’s best for you. Stay in touch with your lawyer and always have at least one trusted friend help you make critical decisions.

Please feel free to schedule an appointment with one of our Murray Lobb attorneys so we can help you prepare all the estate planning legal paperwork that you need. We can also review any contracts you’re being asked to sign regarding a continuing care retirement community (CCRC). We look forward to being of service to you.

Choosing Reputable Charities for Your Texas Estate Plan

Many Americans now name one or more charities in their Wills or other estate planning documents to help these important cultural and humanitarian groups maintain adequate funding. However, others less familiar with charitable giving need to understand that, before arranging these types of gifts, they must carefully evaluate each charity or non-profit group to be sure their funds will be shared properly. 

Fortunately, there are several reputable organizations that will readily help consumers decide which charitable or non-profit groups are properly using all their donations while minimizing administrative costs. These same “watchdog” groups often urge all charitable groups to maintain open donation and expenditure records. In addition, our Texas Attorney General’s Office has put together some useful tips that can help all of us do a better job of deciding which charities will be the most responsible recipients of our testamentary gifts.

Here’s a list of basic tips that can help all of us better evaluate all non-profits and charities. That information is followed by a list of different websites and groups dedicated to providing consumers with current news about charitable activities. Of course, it’s always best to start your search by first visiting with your Houston estate planning attorney who may already know about the reputations of many charitable organizations.

Important Information to Obtain While Choosing Charities to Include in Your Estate Plan

  • First, be sure to obtain the full legal name of each group, its address and telephone number. Next, ask if the IRS has formally recognized it as a public charity that’s tax exempt. Then, ask if your donations will all be fully tax deductible.
  • Find out how long the non-profit or charity (hereinafter just referenced as ‘charity’) has been in existence.  While longevity doesn’t always ensure completely honest and frugal management of funds, it does mean that it should be easier to research the group’s reputation by visiting several of the online sources named below.
  • Request a recent annual report that clearly indicates how much money the group spends on administrative costs and how much of every donated dollar will directly benefit those the charity is seeking to help.
  • Find out if the charity’s main goals are related to education, medical services, scientific and medical research – or perhaps providing scholarships to those pursuing careers in specific vocational fields.
  • Do not give the group any of your private bank account or credit card information during your investigative calls – although it’s best to be honest about your intentions. Also, if you’re not ready to receive numerous emails or letters to your home address, avoid giving that type of information out right now.

Be sure to ask members of your professional or business circles if any of them have had positive experiences with the charities that interest you the most. When any charity has a publicly named board of directors, consider contacting those individuals directly by phone to ask them about their experiences with handling tasks on behalf of the charity.

When you’re ready, start visiting some of the websites set forth below to see what you can find out about each of the charities that seem to be highly reputable.

Online Websites Offering Detailed Information About Various Charities

  • Give.org. This website includes the sub-title, “BBB Wise Giving Alliance.” On its page dedicated to donors, it states that you can look up information about each charity’s effectiveness, governance, finances – and current brochures or other materials available to the public.
  • The American Institute of Philanthropy (Charity Watch). Among its various offerings, this website offers a list of charitable groups involved with some highly specific causes and issues.
  • Guidestar. This online resource offers a wide array of information about many reputable non-profit groups.
  • Charity Navigator. Like the other websites already named above, this one offers timely information about many charities. It also provides a “hot topics” link that will tell you more about charities currently in the news for one reason or another.

All four of the oversight groups listed above are noted on the Texas Attorney General website. You can also find out additional information about specific charities by visiting this Consumer Reports page.

If you haven’t already thought about giving to a charity or non-profit when you pass away, please consider doing so now.  All Texans need to do a bit more to help others so our state can become more compassionate — and improve our current ranking for charitable giving.

Please feel free to contact our firm so we can explain some of the best ways to include charities as beneficiaries in your estate plan. There are specific legal ways of handling this task so that your estate will reap the best tax advantages available.