• April 20, 2011, 2:00 p.m. - 3:00 p.m. at our Austin office.  You are welcome to stay for the Medicaid workshop, which begins at 3:15 p.m.  
• April 28, 2011, 2:00 p.m. - 3:00 p.m. at our Georgetown office.  You are welcome to stay for our Medicaid workshop, which begins at 3:15 p.m.

• April 20, 2011, 3:15 p.m.- 4:15 p.m.at our Austin office.  You are welcome to attend our Estate Planning workshop, which begins at 2:00 p.m.

• April 28, 2011, 3:15 p.m.- 4:15 p.m.at our Georgetown office.  You are welcome to attend our Estate Planning workshop, which begins at 2:00 p.m.

What do Howard Hughes, Pablo Picasso, and Abraham Lincoln have in common? In addition to making incredible contributions to society, these prominent figures all died intestate (without a will or any other binding declaration).

Hughes died in 1976 and his infamous handwritten will surfaced at The Church of Jesus Christ of Latter-day Saints in Salt Lake City. The will suspiciously granted a large fortune to a man living outside of Las Vegas claiming to have been an acquaintance of Hughes. After seven years of proceedings, the Courts rejected the handwritten will, dividing the estate amongst Hughes' twenty-two cousins.

Picasso died in 1953, leaving behind a valuable name and a fortune of artwork. Because he died intestate, his family contended for the assets in court over a six year period, spending more than thirty million dollars of the estate on legal fees.

As the first President to be assassinated, Lincoln died intestate in 1865. Even though Lincoln himself was a lawyer, he failed to adequately plan for his estate. The predicament ultimately required the service of Supreme Court Justice David Davis to settle the estate.  

Hughes, Picasso, and Lincoln did a lot of things right, but they all did one thing wrong.  They didn't plan. The frustration this caused their families is the reason we at  The Greening Law Firm, P.C. stand by the principle that Planning Adds Predictability.

America is a nation that is famously built by entrepreneurs.  Many entrepreneurs start business that are carried on by their children and grandchildren. The H.J Heinz Company and S.C. Johnson "A Family Company" are prominent examples of such businesses. Consider the multi-generational success of these businesses when planning for the future of your business.

In 1869, Henry John Heinz founded the H.J. Heinz Company with a profound belief in his product and a sincere concern for sanitary and safe working conditions for his employees. Upon his death in 1919, Henry John Heinz left his family with a legacy of values and a wildly successful business. Four generations of succession later, the H.J. Heinz Company still maintains its identity as a family business.  More importantly, the Heinz family maintains the philanthropic principles that have survived as part of the company for more than a century and a half's time.

In 1882, at the age of 50, Samuel Curtis Johnson purchased the Racine Hardware Company, a small flooring company that employed Johnson. After some unique ingenuity, Johnson created a floor wax that would be the early foundation of S.C Johnson's ultimate branding empire. From the beginning of his success, Samuel Curtis Johnson charitably donated 10% of his income to community programs, especially programs serving the youth. Subsequent Johnson generations would enrich Samuel Curtis' legacy integrating a profit-sharing program enabling company employees to share in the success of the proud family business, and pursuing environmentally concerned production techniques. Five generations later S.C. Johnson remains "A Family Company."

H.J. Heinz and S.C. Johnson "A Family Company" didn't weather more than a century's time of transitions without excellent succession planning. High-quality succession planning didn't guarantee their continued achievements in business and philanthropy, but it did enable those continued opportunities.

The New York Times has some advice on preparing your own business for succession. A proper succession plan should involve a few basic steps. First, you should make an honest assessment of potential successors. This can be difficult when children and family dynamics are involved, but a separation of business sense and personal relationships must be established to preserve the future of a business. To legitimize this process, advisers encourage business owners to put potential successors through a series of evaluations from an external source. Following this period of evaluation it should become clear who the most suitable successor(s) may be.

After selecting the successor(s), it is crucial to ensure their utmost preparation. Put successors in a position to flourish internally or with an alternative company. Their pre-established qualifications will produce results, and lead to a sense of self confidence crucial to the next generation. Once this is in motion, deal with the business' most crucial employees. For example, including crucial employees more extensively in future profits is a good way to ease the transition, enabling the successor(s) to benefit from satisfied, high-quality lieutenants. As always, a business should seek to minimize its tax exposure. Case-specific techniques will vary widely, but be sure to consider an outlet to cover or limit estate tax costs as the business passes from one generation to the next. 

by Michael Ettinger, esq. 

A common provision in wills and trusts, where one of the couple in a second marriage owns the marital home, goes something like this "My surviving spouse shall have the right to reside in the home for so long as he/she desires, provided he/she pays all taxes and insurance premiums thereon and shall maintain the premises in good order and repair. Upon his/her vacating the premises, the same shall be sold and the net sale proceeds distributed to my children in equal shares, per stirpes."

Sounds fair, doesn't it? After all, the surviving husband or wife gets to live in the house as long as they like, rent-free, subject only to payment of the carrying charges. In practice, however, the plan carries a significant defect. It puts the surviving spouse in a "Catch 22". If they find the house is too large, too difficult or too expensive to maintain they have the choice to leave, but then face the prospect of a significant expense to purchase another residence out of their own funds or, in the alternative, the cost of rental which may add thousands of dollars in monthly outlay.

For this reason, we recommend that the surviving spouse gets not only the use and enjoyment of the home for life, but also the use and enjoyment of the proceeds of sale of the home for life, to either purchase a smaller home or condo or use the income from the sale of the home to pay for a rental apartment. In our view, the children of the previous marriage lose nothing. The surviving spouse could have lived in the house for life so why not give him or her the flexibility to trade down as they get older? If there are excess sale proceeds, these can be invested to provide additional income to the surviving spouse. The co-trustee, perhaps the attorney as previously suggested in these pages, makes sure the funds stay intact for the deceased spouse's children after the second spouse dies.

A word of warning about leaving the house to the spouse for life. The trust or, if there is no trust, the children themselves, remain responsible for major repairs such as a new boiler or a new roof. As such, leaving a home in trust for the lifetime of the surviving spouse in a second marriage may end up a burden to your children. Good planning will consider whether the home should be sold within a fixed period, perhaps between two and five years from the date of death, to avoid this problem.