Probate In Chicago (and elsewhere): A Legal Root Canal
- Who died (the decedent)
- Whether the decedent died with or without a will
- The estimated value and composition of the estate of the decedent
- Who the decedent’s heirs were at death (includes surviving spouse and children); and
- Who is going to be the executor (or, if no will, the administrator)
So long as everything looks to be in order, the probate estate is opened and someone is named executor or administrator. The executor/administrator then has the power to deal with the decedent’s property, distribute assets, deal with creditors and eventually close the estate.
I’ll write more about specific aspects of probate, but probate is (1) expensive and (2) totally avoidable. Oh…and it also is time consuming and causes loved ones to literally be knee-deep and reminded of death for a year or so. Not so good. Here are some horror stories about inadequate estate planning for your reading leisure: http://www.smrslaw.com/articles/2007-02-art1.htm
Corporate Formalwear: Maintaining a Well-Dressed Business Entity
Due diligence. What a horrible term. Just mouthing the words brings me back to nightmares of boxes upon boxes of documents, all of which require a thoughtful review and analysis. Business owners don’t often worry about due diligence because they’re not the ones that have to do it (that’s what lawyers and accountants and consultants are for). Even so, due diligence will hit a business owner right where it hurts…in the wallet. Seriously…just look at this very basic due diligence list: http://www.1000ventures.com/venture_financing/due_diligence_checklist_byvpa.html
A business is a living, breathing entity. It has a body (corporate/LLC shell), a mind (owner/senior staff), it eats (sells goods/provides services) and goes to the…well…you get the analogy. And just like a person, a business has a paper trail. Documentation is the only reliable way of knowing what a business has done or will do. And this documentation is the subject of due diligence.
The most basic business formalities are: (1) keeping business and personal finances separate; (2) maintaining an updated, comprehensive document book of business activity; and (3) conducting business in the company’s name.
Due diligence can be the equivalent of running from Freddy Kruger in your dreams, or a leisurely stroll through a park on a nice day. The choice is up to the owner and senior staff; and that choice is whether or not to adhere to business formalities. The more it’s like a Nightmare on Elm Street movie, the more time and money it will cost the business. A poorly documented business will require clean-up before it can undertake many transactions, including: buying or selling the business or its assets; taking on an investor or additional investment; or even providing basic documentation in advance of entering into a lease or opening a bank account.
As I’ll write in the future, maintaining corporate formalities can be cheap and easy. The alternative is expensive and annoying.
Dying Without a Will in Chicago (and elsewhere): Not Good
Ahhhh…the Will, the most basic and best known estate planning tool. Used since the dawn of time to pass fiefdoms both large and small to loved ones (or to stick it to bratty kids). Wills are great for a few things. First, entertainment: http://money.howstuffworks.com/personal-finance/financial-planning/will6.htm. But more importantly, a Will can (1) assure desired distribution of property to the decedent’s (dead person’s) intended distributees; and (2) save a lot of time, expense, and trouble.
The former is pretty clear. You write a will to make sure the gold panda locket you got in China goes to your niece. In this respect, the main thing to watch out for is the division of probate property versus non-probate property. Probate property passes through a will…like the golden panda locket or the contents of a safe deposit box that has only the decedent’s name on it. Non-probate property passes via outside agreement, like a house or bank account in joint tenancy, or the assets in an IRA where beneficiary designations have been made.
The latter is clear only to lawyers. Even a basic will can make the probate process much cheaper, less time consuming and less horrible for loved ones of the decedent. How? First, the family can avoid fighting over the golden panda locket (you never knew how many people wanted that thing). A will can “undo” certain default state law rules which require the executor to put up a bond, or require strict court supervision of the estate. Finally, a will can be the decedent’s last statement on who he or she wants as guardian of minor children (and generally a court will respect that statement).
As I’ll write in the future, a will is just a piece of a comprehensive estate plan. But it’s a vital piece if you want your golden panda locket to go to your niece and not someone else who might sell it to Cash 4 Gold.
Genesis Post
Ahhh…first post. What to write about? How about I write about the stuff I’m going to write about? Okay.
This blog is all about seeing the whole picture, just as I do in practice. My clients can’t waste precious time and money on a team of 20 attorneys who cumulatively bill $5000 per hour while they’re grabbing coffee and scones. Nope…my clients need competent, seasoned attorneys who can see the whole field, not only advising them about the implications of taking on outside capital, but how the transaction will affect their estate plan and tax position.
Okay…enough self-promotion. I’m going to write about a little bit of everything. Estate planning, taxes, probate, employment agreements, buying a business, selling a business, starting a business, trademarks, copyrights, sports law, doing deals, real estate, motorsports, and everything in between.
So stay tuned, buckle up and let’s do this new media Web 2.0 personal branding stuff together.
