COMMONLY ASKED QUESTIONS

1.         What is the difference between an Scorporation and a LLC?

An S corporation is a Corporation, which elects to be treated as a Small Business because they want to avoid double taxation of a Corporation.  An Limited Liability Corporation(LLC) is a hybrid between a corporation and partnership.  The LLC is taxed in a similar manner to a partnership because the IRS ignores the fact that the LLC is incorporated.  Thus, each partner pays taxes on a 1040 personal tax form as though they owned their LLC interest without being incorporated.  For liability purposes, an LLC provides limited liability protection. Unlike an S corporation, an LLC provides flexibility in a similar manner as a partnership.  This flexibility makes an LLC idea for joint ventures among two or more people.

2.         Do we need bylaws or a written agreementamong our business shareholders?

At a minimum, you should have bylaws (S corporation) and an operating agreement for an LLC.  Bylaws or an operating agreement should give you specific instruction in how to elect new shareholders/partners, how to distribute profits and losses, how to elect new officers among many other things. For partners, it is essential to have a written partnership agreement to prevent partnership disputes.  In most businesses, partnership disputes are the most common disputes and unfortunately, most partner’s personal and business assets are subject to another partner’s legal claim.  A common rule is a person should not own their business interest in their personal name if they have partners.

3.         When a lawsuit occurs against the business,why do the business owners often get sued in their personal name? 

A common belief is that if someone incorporates a business, they will protect their personal assets from a business creditor.  In my experience, most business creditors will file a lawsuit against the business and individual business owners.  In many instances, liability protection of a business is a myth.  It is important that you never sign in your personal name (except for business guarantees—be carefulthough).  To receive SBA bank loans, your bank will require a personal guarantee. You must maintain separate business bank accounts, do not commingle your personal and business assets, and have at least four business meetings throughout the year.  The key is you must document that you operate your business like a business to maintain limited liability protection.  My advice is to protect your personal assets from business liability exposure prior to a lawsuit.  After a lawsuit, it may be too late.

4.         Why Should Business Owners Be Careful WithThe Title To Their Home?

In today’s economy, my law firm is working with a lot of distressed businesses.  A common trait is that these business owners did not anticipate the possibility of lawsuits.  Approximately twenty (20) percent of business owners will be sued on a yearly basis. In many cases, a business owner sues another business and gets countersued.  Thus, my simple advice is to protect your home and other assets prior to a lawsuit.  Most husbands and wives title their home in a manner where a creditor can force the sale of their personal residence despite their spouse not being active in the business. This can be simply cured though by advanced planning.

5.         Why Are Wills and Trusts Important to aBusiness Owner?

Incapacity is a real concern among business owners especially over the age of fifty (50) years of age.  Strokes, cancer, alzheimers, and many other issues affect those over the age of fifty (50). A power of attorney for healthcare and property is vital because you nominate an agent to act on your behalf if you shall become incapacitated.  If you become incapacitated, nobody can cash your checks, write payroll checks, or conduct your business affairs.  Thus, a proper business succession plan is important.  For most business owners, a trust is important because it avoids probate and guardianship court and a smooth transition can occur upon your incapacity or death.

6.         Why is Asset Protection Important to a Business Owner?

First, asset protection is a legal strategy of using Trusts,LLCs/Corporations, and other strategies to protect your personal assets from liability risks.  For most business owners, their business is an extreme high likelihood of liability exposure.  One lawsuit can destroy you and your family’s retirement and financial stability.  Generally, certificate of deposits, stocks, checking and banking accounts can be frozen upon a judgment.  A judgment is when one party wins a lawsuit.  With advanced planning, we canprotect your personal assets from a business liability.

7.         Who is Robertson Law Group, LLC?

We are a law firm, which concentrates in Estates and Trusts, Commercial Transactions, Asset Protection, and Commercial Litigation.  These areas of law are interrelated and an knowledge of these areas of law is necessary to best protect a business owner and their family.  We have a downtown Chicago law office at 542 S. Dearborn, Suite 1260, Chicago and operate out of a home office in Naperville, Illinois.  In Naperville, Illinois, we offer home, business, or office visits.  The principal, SeanRobertson, has a business center, which offers privacy and a nice environment for a consultation.  Robertson Law Group, LLC is a family business because Sean and Brenda Robertson work as a team.  As a husband and wife business, we offer big law firm quality with a small law firm touch.

8.         What is the Principal’s Background?

Sean Robertson (“Sean”) graduated from University of Illinois at Urbana-Champaign in1997 and graduated from DePaul University College of Law in 2003.  Sean concentrated in Taxation, Corporate, and Wealth law.  Sean has expertise in LLC and Corporate Taxation, LLC and Corporations, Estate Planning and Estate GiftTaxation, Employee Benefits, and Asset Protection. 

Sean also is Of Counsel with Debt Counsel for Seniors and the Disabled where he is the Asset Protection Counsel.  As Asset Protection Counsel, Sean counsels seniors and the disabled throughout the United States. On a daily basis, Sean understands how creditors and debtors operate to avoid paying creditors.  Sean works for creditors and debtors.  Thus, Sean is a Wealth Preservation Attorney and Experienced Entrepreneur who understands that risks that entrepreneurs and business owners take when owning a business. 

Robertson Law Group, LL

630-364-2318 or 312-498-6080

e)  RobertsonLawGroup@gmail.com

Office locations in Naperville and downtown Chicago

Key words:  Wills, LLCs, S corporations, Naperville, Chicago, suburbs Chicago, Lisle, Downers Grove, Aurora, & downtown Chicago

COMMONLY ASKED QUESTIONS

1.         What is the difference between a will and trust?

A will is a written instruction explaining one’s wishes upondeath.  In contrasts, a Revocable LivingTrust “Living Trust” (or otherwise called a trust) is a written agreement that operates during your life and upon your death. There are several differences:

Will

Simple and easy to create; 

Must go through probate court, which is supervised by a judge;

Guardianship provision can describe who shall be your guardian for your children; &

Inheritances are subject to divorce or creditor proceedings for your beneficiaries;

Public information, which means anybody can know what you inherited. 

Trust

Trust avoids the pain and expense of probate court;

Inheritances are not subject to divorce or creditor proceedings;

Private proceeding where only the beneficiaries know the written details;

Can require inheritances to be disbursed at different times or have strings attached to an inheritance such as go to college;

Operational during your lifetime and avoids guardianship court, which reduces headaches, significant expense, and hassle associated with court proceedings. 

2.         What is probate court?

Probate court is the court where a person’s assets are distributed.  Most people falsely assume that a will does not go through probate court. A will must undergo probate court and probate court invites conflict due to mailing out certified notices to potential beneficiaries.  This creates conflict and family feuds.  If you do not have anything in writing, this is called intestate succession, which simply means that the State distributes your assets according to the state succession formula.  There are no exceptions to the succession formula.

3.         Why do most people have to go throughprobate court?

Most people go through probate court because they own real estate.  By law, real estate cannot be sold without providing proper legal title. Many heirs do not realize that have to go through probate court untilthey get ready to sell their family home. Probate court can be expensive because if there is more than one heir, the family is required to have an attorney, pay court costs, and may have topay an annual surety insurance bond.

4.         What typically happens to a husband and wife that own property?

Generally, the surviving spouse inherits one hundred (100) percent of the house after their spouse dies. Thus, the surviving spouse does not go through probate court becausethey have proper title.  However, uponthe surviving spouse’s death, probate court becomes necessary for most people.

5.         What if we add somebody’s name to our title, will this avoid probate court?

No, adding somebody else’s name, which is recommended by many attorneys are not a good strategy to avoid probate court.  In fact, adding somebody else’s name could cause you problems because their creditors could sell your home at publicauction to pay off any credit card, medical bills, or other bills that a personhas.  Thus, if a person gets sued and loses, their creditors may force you to sell your home to satisfy their debt.  Additionally, adding another’sname to your title increases your risks of probate court because if any title holder dies or becomes incapacitated, this could cause you to undergo probate court prior to selling your home.

6.         Why do most husband and wives have their property titled in the wrong manner?

In today’s economy, people are faced with increasing debts,which they cannot handle.  Most husbands and wife’s title their home where if one spouse dies, than the other spouse automatically inherits the home.  This is called Joint Tenants with Right of Survivorship.  The benefit is avoiding probate court.  However, if one spouse has creditor problemssuch as business debts, credit cards, medical bills, or any debt related debts than your creditors can force the public sale of your home despite being current with your mortgage.  The main point is title your home as Tenancy by Entirety.  With Tenancy by Entirety, one spouse can have a judgment against them and the creditor cannot force the husband or wife to sell their home.  Please note that you must have a will or trust to distribute your property upon your death, or you will go through probate court.  There are other strategies to titling your home to avoid probate court as well that are beyond these questions.

7.         Do you have to undergo probate court for each state where you own real estate or property?

Generally, you must undergo probate proceedings wherever you own property such as real estate.  For example, Bob and Sue own a house in the Western Suburbs and have an investment or vacation property in Wisconsin.  In this example, Bob and Sue must undergo probate court in Wisconsin and Illinoisif they do not have a proper succession plan.

8.                 Can a Will orTrust Avoid My In-laws From Gaining Access to My Inheritance?

An inheritance distributed by a will is subject to your children’s creditors including a divorce spouse.  A creditor also could involve a business dispute, credit card companies, hospital or medical collections, or any other debts.  A trust has a spendthrif tprovision, which prevents a beneficiary’s inheritance being subject to adivorce or credit proceeding.

9.         How Much Will An Estate Plan Costs Me?

Our law office cannot access your specific circumstance without a consultation asking you about your wishes or concerns.  Generally, most families have issues that must be addressed to provide a smooth transition upon death or incapacity.  As a rule, an estate planning cost a minimumof $750 to $10,000.  To receive a free initial consultation at your home, please call Robertson Law Group, LLC at 630-364-2318 or 312-498-6080 or email RobertsonLawGroup@gmail.com

?BASIC ESTATE PLANNING FOR SENIORS?

Will vs. Revocable Living Trust

          A will is a legal document, which distributes your property upon your death.  A will is simple and inexpensive.  A Revocable Living Trust is a legal document, which acts similar to a Will in distributing your property with minimal hassle.  Generally, a Will involves hassle.

Probate Court:  Why Wills Do Not Avoid Probate Court?

A Will is public information and must be filed with a court.  For example, Sam Smith aged 70 years old is deceased and left a Will.  Sam Smith?s heirs must file Sam?s Will with Probate Court in the County where Sam lived.  Unlike a Will, a Revocable Living Trust (hereinafter referred to as ?Trust?) if planned correctly involves no court involvement and passes one?s assets quickly and easily upon death or incapacity.  The second difference between a Will and a Trust is that a Trust plans for incapacity such as Alzheimers, dementia, and strokes.  Seniors must be concerned about long-term care issues and incapacity planning is more vital now than planning for one?s transfer of assets upon death.  An estimated fifty (50) percent or more Seniors are facing long-term care issues.

Unlike a Will, a Trust plans for incapacity and death.  For instance, Sam Smith has a stroke and is unable to manage his healthcare concerns and finances.  In this example, Sam Smith?s family members must either have a valid power of attorney (healthcare and property) or face Guardianship Court.  Additionally, your loved one?s must undergo a probate or court procedure in every state where you own real estate.  This creates a burden upon your family and is expensive and time consuming.  Generally, a probate proceeding takes a minimum of nine (9) months to several years.  More importantly, court involvement creates family conflict because of Will contests.  Attorneys and Executors must mail notices to potential heirs involving Probate Court unlike a Trust.  A Trust is private and is typically a secret document with only beneficiaries knowing the Trust?s contents and assets.

Guardianship Court & Incapacity Planning

Guardianship Court is a type of court that determines whether disabled adults are incapacitated and administers a process in choosing a Guardian to manage their financial matters and healthcare concerns.  With a Trust, one?s assets such as their primary home, checking/savings accounts, certificate of deposits and any other assets are titled in their Trust?s name.  Many people add relatives to their accounts or house deed, but this is ineffective because their relatives may have lawsuits and other legal matters that could jeopardize a senior?s assets.  In this financial crisis, lawsuits, judgments, and bankruptcy are major concerns.  Second, relatives and friends die and complicate a senior?s life.

Powers of Attorney for Property & Healthcare

          There are two types of Powers of Attorney:  Property & Healthcare.  A Power of Attorney for Property appoints an agent or successor agent(s) to manage one?s finances in case of incapacity.  It is highly recommended to have multiple agents in case your original agent is unavailable, deceased, or incapacitated.  An Agent is empowered to make financial decisions for the incapacitated adult.  The second type of Power of Attorney is a Power of Attorney for Healthcare.  In a Power of Attorney for Healthcare, you state your wishes in case you are unable to make healthcare decisions. 

POWER OF ATTORNEY VS. LIVING WILL

            A living will is an advanced healthcare directive informing your doctor how you want them to proceed in case of an emergency.  A Power of Attorney is much broader than a Living Will and it instructs your physician how to proceed in a medical emergency and appoints an Agent (your loved one) to make healthcare decisions for you.  Thus, unlike a living will, you appoint an Agent to consult with your physicians and family members and make healthcare decisions as you have instructed them to do.

Conclusion

          In general, a will is sufficient for somebody that does not own any real estate and have limited assets.  In contrasts, a Revocable Living Trust is generally better for Seniors with a house and modest to large assets.  At a minimum, Seniors should have a Power of Attorney for Property & Healthcare in combination with a Will and/or Revocable Living Trust.

          Sean Robertson is Principal of Robertson Law Group, LLC and he concentrates in Elder, Wills & Trusts, Probate & Guardianship, and Asset Protection for Seniors & Adult Disabled persons. Sean can be reached at 312-498-6080 or RobertsonLawGroup@gmail.com.  Sean has a nationwide Elder law, Estate Planning, & Asset Protection law practice.  Sean has his website at www.robertsonlawgroup.com.

?Estate Planning Lessons

from Michael Jackson?s Death?

            In this Article, we will discuss two important estate lessons learned by Michael Jackson?s death. The first estate lesson is your legal affairs must be planned prior to your death or incapacity.

            A.        Guardianship of Minor Children & Incapacity Planning

            Michael Jackson?s death is an educational opportunity because seniors face similar issues to Michael Jackson.  First, Michael Jackson (hereinafter referred to as ?Jackson?) deceased with three minor children.  Seniors are having children at later ages and are responsible for parenting their grandchildren.  Unfortunately, death is a hard topic to grasp, but one that must be planned for. 

            Adult guardianship is a type of probate court, which administers an adult disabled person?s financial and health matters when they are incapacitated.  Guardianship court also hears legal matters involving minor children who have either inherited money or need a guardian appointed.  Jackson?s will preferred his mother, Katherine Jackson (hereinafter referred to as ?Jackson?s Mother?), to be guardian over his children.  A will gives the guardianship court clear direction of Jackson?s intent.  Estate disputes costs heirs thousands to hundreds of thousands of dollars in attorney?s fees and costs and more importantly, your family may be destroyed over your estate matters.  The key lesson is anticipating your potential family conflicts and have your proper legal paperwork prior to your death or incapacity.

B.                 Privacy as a Dispute Resolution Tool

Privacy is a vital tool in managing potential family estate conflicts.  Michael Jackson?s will name his Family Trust as his estate?s beneficiary.  A family trust or otherwise known as a ?Living Trust? or ?Revocable Living Trust? is a legal written document which distributes property upon your death or incapacity. Unlike a will, a family trust does not involve court procedures and is administered outside of court.  Hence, in contrasts to probate court where a will is administered and is public information, a family trust has no requirement of mailing out notices to potential heirs including disinherited heirs.  More importantly, a public document such as a will enables a will contest attorney to review the language and determine how to contest the validity of the will.  In contrasts, a family trust is more difficult to attack because disinherited beneficiaries have no legal right to see the contents of the document.  Therefore, the non-court involvement and privacy of a family trust is a powerful tool in managing potential family disputes.

by Sean L. Robertson, Attorney at Law

   Robertson Law Group, LLC

  9923 S. Ridgeland Avenue, Suite 99

  Chicago Ridge, Illinois 60415

  w) 312-498-6080 or RobertsonLawGroup@gmail.com       

Same Sex Couples/Non-Traditional Couples

            Robertson Law Group, LLC has an affiliate law firm, LGBT Estate Planning Center, LLC, that understands the unique needs of same sex couples and non-traditional couples.  The mission of the LGBT Estate Planning Center, LLC is to promote and advocate the legal recognition of same-sex partnerships and families by having an active presence in the community, focusing on legislative change, and education.  We achieve this mission by providing tax, estate, and asset protection planning to individuals, families, and businesses within the LGBT community.

List of Services:

Wills

Living Wills

Power of Attorney

Revocable & Irrevocable Trusts

Charitable Planned Giving

Special Needs Trusts

Business Succession Planning

Asset Protection Planning

Estate & Gift Tax Planning

Business Entity Formation

Please call Robertson Law Group, LLC at

312-498-6080 or Robertson Law Group, LLC

WEALTH PRESERVATION:

 "ASSET PROTECTION STRATEGIES

THAT PROTECT YOUR WEALTH"

            The first wealth preservation strategy is to preserve your assets by creating a Revocable Living Trust (hereinafter referred to as "Living Trust").  A Living Trust is a written legal agreement that details your specific wishes with respect to incapacity and death.  A Living Trust protects your assets during your life in case of incapacity.  Incapacity is a condition where one cannot manage their own property, finances, or healthcare decisions as a result of a lack of physical or mental abilities.  Unlike a will, a Living Trust' provides a smooth transition during a persons lifetime in case of a stroke, car accident, or any other disability that could occur.  A Living Trust is typically used in connection with a Power of Attorney for Property and Healthcare. 

            A Power of Attorney for Property and Healthcare are legal processes where a person designates an agent to speak on their behalf in case they cannot manage their own finances or make their own healthcare decisions.  Guardianship is a court procedure where a person asks a court to be appointed as guardian for an adult disabled person.  Guardianship is a legal process where a person requests a court to allow them to manage a personfancial interests and make personal decisions for them such as healthcare decisions.

 Guardianship court procedures should be avoided because a person's wealth can  quickly be diminished as a result of paying nursing home care and legal fees and costs.  Long term care insurance is insurance for people that manage the risks and expenses associated with nursing home and private nursing care.  Guardianship court is often adversarial because competing persons want the power to take care of their loved one.  A guardianship procedure can quickly result in a high expenditure of legal fees because multiple attorneys are employed.  The attorneys get paid out of the incapacitated persons assets.

The second purpose of a Revocable Living Trust is to provide a smooth transition upon death.  Unlike a will, a Revocable Living Trust should not involve a court procedure if designed correctly.  Upon death, there is a court process called probate which is a court that determines who is the rightful person to inherit from the deceased person.  There is a misconception that creating a will is a way to transfer one's assets to a disabled beneficiaries.  After one's death, a will must be admitted into court and notice must be given to the deceased person's relatives.

This notice requirement invites disputes and may create an adversarial family conflict.  For example, a client of mine is facing a will contests by her brother because the brother is not happy that the father left all of his assets to only one daughter.  Will contests cause family conflict and costs a lot of money in terms of legal fees and costs. 

The family conflict could have been avoided by transferring one's assets upon death through a Living Trust.  Unlike a will, a Living Trust does not involve a court procedure and the Living Trust does not create a situation where notice must be given to any family members except the one's inheriting the Trust Assets.

Furthermore, a Living Trust is a private document where a will is a matter of public record where anyone can see the contents of the will.  A simple way to preserve assets is privacy and avoiding court procedures.  Attorneys often create bigger conflicts, which cause excessive attorney's fees and costs.  More importantly, families are destroyed and most people could not put a price on their family. 

The true purpose of a Living Trust is to transfer assets in a manner that minimizes family conflicts.  Hiring an experienced Living Trust's attorney with guardianship and probate experience is important because choosing the Trustee and drafting the Living Trust in a manner that minimizes or eliminates potential family conflicts are crucial.  One of the mistakes of inexperienced attorneys are ignoring or not noticing potential conflicts that could create family friction.  The area of wills, trusts, and estates have several unique situations such as special needs children, adult disabilities, and extensive wealth that could cause court procedures, estate and gift taxation, and situations where one does not place assets beyond the control of the federal and state government.

The second wealth preservation strategy is owning real estate and investments in the correct manner.  Many people own investment real estate in their individual or joint name.  A person should incorporate and create a business entity that is designed to own real estate investments in a business entities name.  Thus, you are creating a fictional person or business entity that is separate from your personal finances. 

Owning real estate investments in your personal name exposes all of your assets to lawsuits or creditors.  Many people falsely assume that insurance is adequate to protect their assets from lawsuits.  First, insurance companies often deny claims and people are faced with the prospect of paying for a lawsuit out of their own pocket or all of their assets being exposed to a potential judgment from their real estate investments.  Second, people are not properly insured and have insurance policies that only provide for $250,000 in coverage.  A person who is injured in a car accident or a fire may have extensive damages exceeding $1 million.

 As a general rule, high net worth individuals should have a minimum of $1 million dollars of liability coverage. There are exceptions to this general rule and you should consult an insurance liability expert to discuss proper insurance coverage.  Another method to reduce the likelihood of lawsuits is a privacy tool called a Private Land Trust.   A Private Land Trust is a privacy technique that keeps ownership of a property or properties anonymous.  Typically, a private land trust shows the owner of the property as the Bank, which is the trustee of the private land trust.  Banks charge trustee fees that fall in the range of a couple hundred dollars per year per property.

 In considering a lawsuit, attorneys perform an asset search, which assists them determine whether a person or business entity has sufficient assets to warrant a lawsuit.  As a general rule, attorneys do not want to sue people or business entities that do not own sufficient assets or have insurance.  A private land trust is a tool to discourage lawsuits because an attorney may be discouraged from bringing suit because they cannot determine whether a person has assets to warrant a suit. 

Another serious consideration in picking a private land trust is to minimize credit and bank fraud.  Individuals and groups are scamming seniors and high net worth individuals and using their good credit and good name to secure mortgages, medical care, and credit.  Keeping your identity secret is important in today's society where identify theft is on the rise.  Identify theft can cause families to deplete their assets and spend excessive legal fees.

The third strategy to preserve your wealth is to protect your assets against taxation.  High net worth families should have experienced advisors such as accountants and attorneys to assist them to minimize taxation.  Selling investment real estate and stocks and bonds should be carefully done to minimize capital gains taxes.  Tax attorneys and accountants assist high net worth families to structure their assets and transactions in a way that minimizes taxation. 

Additionally, high net worth families should protect their assets from estate and gift taxation.  Estate taxation is a tax designed for people that own assets above the threshold the government allows without assessing a tax.  In 2007, the federal government allows each person to own $2 million dollars in assets without assessing an estimated 50 percent estate tax.  For estate tax purposes, the government considers assets such as life insurance proceeds, business and real estate interests, personal property, stocks, bonds, art, checking and savings account(s), and anything that could be sold for money.

Gift taxation is a tax assessed by the Internal Revenue Service that taxes gifts.  For example, a quit claim deed to another party without adequate consideration is a gift.  People should be careful in setting up and performing business and real estate transactions to ensure that one is not subject to a gift tax.  A gift tax is about a 50 percent tax.

The third wealth preservation strategy is to set up a family business such as family limited partnership (hereinafter referred to as "FLP")or limited liability corporation (hereinafter referred to as "FLLC").  A FLP or FLLC is an asset protection tool that places assets beyond the reach of malpractice lawsuits or creditors.  This strategy is like adding virus protection to your computer.  A FLP or FLLC sets up different sets of assets that minimize the risks of lawsuits such as malpractice or civil lawsuits.  The asset protection goal is to place assets outside the control of an individual and outside the reach of creditors.  This Article will not explain the benefits and weaknesses of FLPs or FLLCs further.  Please see a specific legal article that examines FLPs or FLLCs in further detail.

Sean L. Robertson (�Sean�) is a Wealth Preservation Attorney & Principal of Robertson Law Group, LLC.  Sean concentrates in Wills and Trusts, Asset Protection, Probate and Guardianship, and Business Transactions.  Sean can be reached at 312-498-6080 or RobertsonLawGroup@gmail.com.

Robertson Law Group, LLC

9923 S. Ridgeland Avenue, Suite 99

Chicago Ridge, Illinois 60415

w) 312-498-6080 f) 312-377-2480

RobertsonLawGroup@gmail.com

www.robertsonlawgroup.com

blog:  www.assetprotectionlaw.blogspot.com

SERVING COOK, DUPAGE, AND WILL COUNTIES

TEN ESTATE PLANNING MISTAKES

FOR PHYSICIANS & DENTISTS

1.                  Titling property jointly with your children as a substitute for a will.

With a will or Revocable Living Trust (Trust), you make contingencies in case your initial beneficiaries listed are either disabled or deceased.   Having a second or third contingent beneficiary is crucial because it helps to avoid probate court.  Additionally, titling your personal residence jointly can result in partial loss of the capital gain exclusion if it is sold before your death or result in a gift tax (50% tax rate).

2.                  Failing to plan for the possibility of children getting divorced or having problems with creditors.

Parents often regret having made outright gifts to their children when the child subsequently divorces and the ex-son or daughter-in-law is awarded an interest in the gifted property by a court, or when property is taken pursuant to a legal creditor judgment against the child.  These problems can be reduced through Trusts because Trusts have a spendthrift provision, which prevents the inherited money being subject to a divorce or creditor of the surviving beneficiary.

3.                  Underestimating Family Conflicts Caused By An Inheritance.

Any person setting up a will or Trust should strongly consider the family dynamics when considering who should be a Trustee and who should inherit their estate.  For example, if A dies and has a surviving spouse, which is the result of a 2nd marriage and A has two children from a first marriage, this family will likely have a serious problem.  If the estate is not properly structured, the 2nd husband and A?s kids from the first marriage will likely dispute who is entitled to plan the funeral, inherit from the estate, and whether the 2nd husband should continue living in the residence that A and the surviving spouse lived in together.

4.                  Failing to plan for the possibility of a guardian for your children if they are under age 18.

Many families fail to plan who they will choose to be the guardian over their minor children.  A couple factors should be considered: a)  who is your first, second, and third choice for guardian over your minor children if you and your spouse are deceased; b) should one or two guardians manage the finances and parental responsibilities; c) what happens if your choice of guardian is divorced and unmarried; and d)  what school district and lifestyle will your children have if you choose certain people as guardians.

5.         Failing to plan for children that you do not consider to be your children or grandchildren.

Families (especially high net worth) often ask an estate planning attorney to eliminate language in their wills or Trusts that state that they (person creating will or Trust) want to provide for any unborn or adopted children not listed in the will or Trust.  Many professionals are concerned about illegitimate children or grandchildren claiming a right to a family inheritance that the family was unaware of.

6.                  Underestimating the true value of your estate for Federal Estate Tax Purposes.

Many people are unaware that life insurance proceeds are includable in their taxable estates upon death.  The estate tax unified credit is currently $2 million and if properly structured, an estate tax can be totally eliminated or greatly reduced with some simple planning techniques.

7.                  Selling real estate without considering the benefits of ?step up? in tax basis upon death.

For example, A owns two real estate properties and is 85 years of age.  A is considering selling the property upon her death.  If A sells the real estate properties upon her death, A may pay a substantial capital gain?s tax as a consequence of having a low tax basis in A?s real estate properties.  If A does not sell the real estate properties and A deceases, A?s family gets a ?step up? in tax basis in the real estate property which eliminates the capital gain?s tax on the real estate properties.

8.                  Protecting loved ones from a substantial inheritance.

One benefit of a Trust is the creator of the Trust can put restrictions on use of a beneficiary?s use of Trust?s assets to protect a beneficiary from their inability to manage money, protect a beneficiary from immaturity, and guaranteeing that a beneficiary will not spend all their inheritance by selecting a Trustor that is good with managing money.  For instance, one always should strongly consider how to protect their children and their children?s lifestyle such as choice of educational institutions if the guardian is irresponsible with money.

9.                  Failing to plan for incapacity or disability.

Families should have appropriate powers of attorney for property and healthcare to appoint a guardian or conservator to act on their behalf if you become disabled or unable to make healthcare or financial decisions for yourself.  For instance, if you became disabled today, would you be able to pay your bills or continue running your business.  If you have business partners, would your business be able to withstand the absence of a business partner for a substantial amount of time without draining the resources of your business.  Do you have an adequate buy/sell written partnership agreement and the proper funding vehicles to fund the buy/sell agreement in case of a disability or incapacity.         

10.  Failing to review and update your estate plan every couple of years.

Law changes along with personal, family and business changes make it necessary to update your will or Trust.  For a lot of families, a Trust is more appropriate than a will and seeking out an estate planning expert can prevent your family from conflicts and substantial legal fees and costs associated with probate court.  A second opinion is always good because a lot of attorneys are not seasoned estate planning attorneys and fail to understand the complicated family conflicts and ever changing estate tax laws.  For example, have you had a baby, moved to a different state, accumulated additional assets, or been married or recently divorced?  If you have had a substantial change in your family or personal life, you should strongly consider scheduling an appointment with an estate planning attorney.

            Sean L. Robertson is a Wealth Preservation attorney concentrating in Asset Protection, Estate Planning, and Physician Legal Planning.  Sean represents Physicians, Healthcare Groups, and Dentists.  Sean can be reached at 312-498-6080 or RobertsonLawGroup@gmail.com

Key words:  Wills, Trusts, Estate Planning, Dentists, Powers of Attorney (Property & Healthcare), Living Wills, Physician, Asset Protection