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Estate Planning & Probate Archives

How estate plans may prevent small business skirmishes

It's understandable for busy business owners in Tennessee to push certain things to the bottom of their to-do lists. But it may not be such a good idea to put off finalizing an estate plan. In fact, poor estate planning has led to legal complications for many late celebrities with business holdings, including Aretha Franklin and Prince. Even one of the world's most famous attorneys, Abraham Lincoln, died intestate, the legal term for without a will.

How Tennesseans can learn from celebrity estate planning failures

While Aretha Franklin and Prince were amazingly successful in their careers, they had shortcomings in regard to estate planning. Both of these legendary performers failed to take clear steps to determine how their wealth would be passed on to their beneficiaries. Franklin, who died without a will, has four grown children, including one with special needs. Prince also died without having created a will.

Estate planning with children in mind

Estate planning can be particularly important for Tennessee parents. When creating wills, trusts, powers of attorney and other key documents, people can make specific arrangements to provide for their children. Creating an estate plan in advance can provide financial benefits like reducing tax burdens or eliminating probate costs and delays. Furthermore, planning ahead can give the estate owner greater peace of mind by knowing that their children and other loved ones will be cared for.

People determine the fate of an estate plan

Tennessee residents and others with an estate plan need to act carefully when naming their representatives. If the wrong person is chosen to act on an individual's behalf, it could blow up the entire plan. The three main representatives a person has is an agent, a trustee and an executor. The agent has authority to act with permission granted in a power of attorney or health care directive form.

Trusts and the rise in interest rates

There are various types of trusts that Tennessee residents can include in their estate plans. With the recent rise in interest rates, the grantor retained annuity trust and the charitable lead annuity trust have become increasingly popular with estate owners who want to pass down more to their beneficiaries.

When a corporate trustee is the right choice

Trusts may have a variety of uses for Tennessee residents. They may be designed to allow certain types of assets to appreciate in value tax free before being passed on to beneficiaries. They may allow the grantor to dictate how distributions will be made based on any criteria the grantor wishes to set, such as the beneficiary's age. Grantors can also use a trust to state their goals.

Estate planning documents should be regularly reviewed

Many people in Tennessee want to complete the estate planning process and then put those documents aside. Due to inevitable life and law changes, however, estate plans can often be ripe for review and updating. This will help to ensure that they accurately reflect one's wishes.

Using trusts to protect assets from adult beneficiaries

People in Tennessee may make a grave error if they leave their assets outright to their adult children without considering whether their offspring have the financial maturity needed to properly handle the wealth they receive. Just because someone is a particular age does not mean that he or she possesses financial sophistication. It is important that individuals consider the risks associated with leaving inheritances directly to adult children and the benefits of using a trust as a vehicle for the inheritance.

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Stover Law Group
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