Latest News

Aretha Franklin, heralded as the “Queen of Soul,” died from pancreatic cancer at age 76 on August 16th at her home in Detroit. Like Prince, who died in 2016, Franklin was one of the greatest musicians of our time. Also like Prince, however, she died without a will or trust to pass on her multimillion-dollar estate.

Franklin’s lack of estate planning was a huge mistake that will undoubtedly lead to lengthy court battles and major expenses for her family. What’s especially unfortunate is that all of this trouble could have been easily prevented.

Such lack of estate planning is common. A 2017 poll by the senior-care referral service, Caring.com, revealed that more than 60 percent of U.S. adults currently do not have a will or trust in place. The most common excuse given for not creating these documents was simply “not getting around to it.”

Whether or not Franklin’s case involved similar procrastination is unclear, but what is clear is that her estimated $80-million estate will now have to go through the often lengthy court, her assets will be made public, and there could be a big battle brewing for her family.

Because Franklin was unmarried and died without a will, Michigan law stipulates that her assets are to be equally divided among her four adult children, one of whom has special needs and will need financial support for the rest of his life. It’s likely that caregivers for her son will need to decide whether to accept the inheritance coming to him and lose all governmental support he may’ve been able to receive, or they may have to disclaim all of the inheritance from his mother’s estate.

It’s also possible that proceedings could last for years due to the size of her estate. And all court proceedings will be public, including any disputes that arise along the way.

Such contentious court disputes are common with famous musicians. In Prince’s case, his estate has been subject to numerous family disputes since he died two years ago, and that even led to the revocation of a multimillion-dollar music contract. The same thing could happen to Franklin’s estate, as high-profile performers often have complex assets, like music rights.

Because these court battles will be public, not only will the contents of  Franklin’s estate be available for everyone to see, but her family’s potential squabbles will likely be the subject of news headlines. All of these things could’ve been prevented with a well-drafted and counseled estate plan.

Although Franklin’s situation is unfortunate, you can learn from her mistakes by beginning the estate planning process now. It would’ve been ideal if Franklin had a will, but even with a will, her estate would still be subject to and open to the public. To keep everything private and out of court altogether, Franklin could’ve created a will and a trust. And, within a trust, she could have created a Special Needs Trust for her child who has special needs, thereby giving him full access to governmental support, plus supplemental support from her assets.

While trusts used to be available only to the mega wealthy, they’re now used by people of all incomes and asset values. Unlike wills, trusts keep your family out of the probate court, which can save both time, money, and a huge amount of heartache. Plus, a properly funded trust (meaning all of your assets are titled in the name of the trust) keeps everything totally private.

Trusts also offer several protections for your assets and family that wills alone don’t. With a trust, for example, it’s possible to shield the inheritance you’re leaving behind from the creditors of your heirs or even a future divorce.

Moreover, trusts also offer protection if you become incapacitated and are no longer able to make decisions about your financial and healthcare needs. Using a trust, you can appoint someone of your choosing (not the court’s) to handle your financials if you’re unable to. With only a will in place, your family would have to petition the court to appoint a conservator or guardian to handle your affairs, which can be costly, time-consuming, and stressful.

Finally, if you have a child with special needs like Franklin did, a Special Needs Trust can prevent your child from losing eligibility for important government benefits, like Medicaid and Social Security. A Special Needs Trust—also not subject to —allows you to contribute funds for your child’s care without disqualifying them for these benefits.

Regardless of your financial status, planning for incapacity or your eventual death is something that you should immediately address, especially if you have children. You never know when tragedy may strike, and by being properly prepared, you can save both yourself and your family massive expense and trauma.

Don’t follow in Franklin’s footsteps; use her death as a learning experience. Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, meet with us as your Personal Family Lawyer®. If you already have a plan in place, we can review it to ensure it’s effective and up-to-date. Contact us today for more information—we promise to make it easy.

We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. Schedule online today.

Non-compete agreements are commonplace in today’s workforce, though some are enforceable and some are not. According to reports from the U.S. Department of the Treasury, roughly 19 percent of American workers, or 30 million people, are currently covered by non-compete agreements.

While non-compete agreements are fairly widespread, they’ve come under fire lately in the courts as being unfair to employees and imposing overly harsh restrictions on competition and innovation. Indeed, some states deem non-competes unenforceable, and in others, they can only be enforced if they meet strict requirements.

In light of this increased scrutiny, we’ve detailed here exactly what these agreements are designed to do and what conditions must exist to ensure they’re legally valid and enforceable. Armed with this information, business owners should be more capable of deciding whether or not their employees need to sign non-compete agreements.

A non-compete agreement is a legally binding contract between an employer and an employee that seeks to restrict the employee’s ability to compete with the employer once the employment relationship has ended. The restrictions typically cover a set period of time and a specific geographic region.

Non-compete agreements are designed to prevent an employee from leaving your company and taking a new position with a competing company—or starting their own company—and using your proprietary company information to compete with you.

Because there is no federal law governing non-competes, the rules covering how these agreements work is left up to the states. And the manner in which they are enforced varies widely depending on the state.

For example, California considers employee non-competes totally unenforceable and will only consider enforcement if it involves the sale of a business. Beyond California, roughly one-third of all states impose some level of restriction on the enforceability of non-competes.

Since enforcement of non-competes varies so much between states, it’s important that an agreement be tailored specifically to meet your state’s requirements. This is even more important if your company does business in more than one state, as you should have different agreements for each state to reflect their unique laws.

n order to be legally valid, the terms of a non-compete agreement should seek to protect your company’s legitimate business interests without harming the employee’s ability to make a living once their employment has terminated.

When challenged, the courts typically scrutinize three elements of a non-compete. To be considered legally valid, a non-compete must:

• Be aimed at protecting the legitimate business interests of an employer
• Be supported by consideration at the time the agreement was signed
• Re reasonable in terms of scope, geography, and time

Wills and trusts are two of the most commonly used estate planning documents, and they form the foundation of most estate plans. While both documents are legal vehicles designed to distribute your assets to your loved ones upon your death, the way in which they work is quite different.

From when they take effect and the property they cover to how they are administered, wills and trusts have some key differences that you need to consider when creating your estate plan. That said, when comparing the two documents, you won’t necessarily be choosing between one or the other—most plans include both.

In fact, a will is a foundational part of nearly every person’s estate plan. Yet, you may want to combine your will with a living trust to avoid the blind spots inherent in plans that rely solely on a will. As you’ll learn below, the biggest of these blind spots is the fact that if your estate plan only consists of a will, you are guaranteeing your family has to go to court if you become incapacitated or when you die.

To determine the right solution for your family, you should meet with us, your Personal Family Lawyer® for a Family Wealth Planning Session™. We offer a comprehensive process for helping you feel confident that you’ve chosen the right planning tools at the right fees for yourself and the people you love.

In the meantime, here are some of the key differences between wills and trusts that you should be aware of.

A will only will go into effect when you die, while a trust takes effect as soon as it’s signed and your assets are transferred into the name of the trust, known as “funding” the trust. To this end, a will directs who will receive your assets upon your death, while a trust specifies how your assets will be distributed before your death, at your death, or at a specified time after death. This is what keeps your family out of court in the event of your incapacity or death.

Furthermore, because a will only goes into effect when you die, it offers no protection if you become incapacitated and are no longer able to make decisions about your financial, legal, and healthcare needs. If you do become incapacitated, your family will have to petition the court to appoint a conservator or guardian to handle your affairs, which can be costly, time-consuming, and stressful.

And there’s always the possibility that the court could appoint a family member as a guardian that you’d never want making such critical decisions on your behalf. Or the court might select a professional guardian, putting a total stranger in control of just about every aspect of your life and leaving you open to potential fraud and abuse by crooked guardians.

With a trust, however, you can include provisions that appoint someone of your choosing—not the court’s—to handle your assets if you’re unable to do so. When combined with a well-drafted medical power of attorney and living will, a trust can keep your family out of court and out of conflict in the event of your incapacity, while ensuring your wishes regarding your medical treatment and end-of-life care are carried out exactly as you intended.

A will covers any asset solely owned in your name. A will does not cover property co-owned by you with others listed as joint tenants, nor does your will cover assets that pass directly to your loved ones via a beneficiary designation, such as life insurance, IRAs, 401(k)s, and payable-on-death bank accounts.

Trusts, on the other hand, cover any asset that has been transferred, or “funded,” to the trust or where the trust is the named beneficiary of an account or policy. That said, if an asset hasn’t been properly funded to the trust, it won’t be covered, so it’s critical to work with your Personal Family Lawyer® to ensure your trust works as intended.

Most lawyers will set up a trust for you, but few will ensure your assets are properly inventoried or funded, and we believe this is the single most important aspect of estate planning—and it’s one that is almost always overlooked. As your Personal Family Lawyer®, we will not only make sure your assets are properly inventoried and titled when you initially set up your trust, we’ll also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust on an ongoing basis, with various maintenance plans to ensure your plan works when your family needs it. This keeps your assets from being lost and prevents your family from being inadvertently forced into court because your plan was never fully completed.

Finally, even with the support of a lawyer like us, it can sometimes be difficult to transfer every single one of your assets into a trust before your death. Given this, consider combining your trust with what’s known as a “pour-over” will. With a pour-over will in place, all assets not held by the trust upon your death are transferred, or “poured,” into your trust through the process.

In order for assets in a will to be transferred to a beneficiary, the will must pass through. During, the court oversees the will’s administration, ensuring your assets are distributed according to your wishes, with automatic supervision to handle any disputes.

However, proceedings can drag out for months or even years, and your family will likely have to hire an attorney to represent them, which can result in costly legal fees that can drain your estate. During, there’s also the chance that one of your family members might contest your will, especially if you have disinherited someone or plan to leave significantly more money to one relative than the others.

Bottom line: If your estate plan consists of a will alone, you are guaranteeing your family will have to go to court if you become incapacitated or when you die.

Furthermore, since is a public proceeding, your will becomes part of the public record upon your death. This means everyone will be able to learn the contents of your estate, who your beneficiaries are, and what they inherit, setting them up as potential targets for scam artists and frauds.

Unlike wills, trusts don’t require your family to go through probate, which can save them time, money, and the potential for conflict. Plus, when you have a trust set up, the distribution of your assets happens in the privacy of our office—not the courtroom—so the contents and terms of your trust will remain completely private.

Wills and trusts do differ in cost—not only when they’re created, but also when they’re used. The average will-based estate plan can run between $500 to $2,000, depending on the options selected. An average trust-based plan can be set up for $3,000 to $5,000, again depending on the options chosen. So at least on the front end, wills are less expensive than trusts.

However, wills must go through, where attorney fees and court costs can be quite pricey, especially if the will is contested. So even though a trust may cost more upfront to create than a will, the total costs once is factored in can actually make a trust the less expensive option in the long run.

That said, each family’s circumstances are different, and this is why as your Personal Family Lawyer® we do not create any documents until we know what you actually need, and what will be the most affordable solution for you and your family, both now and in the future, based on your family dynamics, your assets, and your desires.

With this in mind, our Family Wealth Planning Session Process™ is designed to compare the costs of will-based planning and trust-based planning with you, so you know exactly what you want and why, as well as the total costs and benefits over the long term.

The best way for you to determine whether or not your estate plan should include a will, a living trust, or some combination of the two is to meet with us as your Personal Family Lawyer® for a Family Wealth Planning Session™. During this process, we’ll take you through an analysis of your assets, what’s most important to you, and what will happen to your loved ones when you become incapacitated or die.

Sitting down with us, your Personal Family Lawyer® will empower you to feel 100% confident that you have the right combination of estate planning solutions to fit with your unique asset profile, family dynamics, and budget. Schedule your appointment today to get started.

This article is a service of Christine Faulkner, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

The Tax Cuts & Jobs Act (TCJA) made sweeping changes to exemptions, deductions, and credits for your family’s federal income taxes. But one major change that you might not have noticed is the way the law altered the potential tax consequences of divorce.

Unlike child support, alimony payments have long been tax-deductible for the ex-spouse making the payments and taxed as income for the recipient. And alimony payments were an above-the-line deduction, meaning that the payor did not need to itemize in order to benefit from the tax advantage.

Because the spouse making payments was typically in a higher tax bracket than the recipient, shifting the income to the recipient’s lower tax bracket could result in significant overall tax savings. Indeed, this tax savings was often an important factor when negotiating divorce settlements, and it often led to larger alimony payments.

However, the TCJA repealed the alimony deduction and totally reversed the tax obligation: For divorce or separation agreements executed on or after January 1st, 2019, alimony payments are no longer tax deductible for the paying spouse, and alimony is no longer considered taxable income for the recipient.

Divorce or separation agreements executed before January 1, 2019 are grandfathered in under the law, meaning alimony will remain tax deductible for the paying spouse and taxed to the recipient. That said, pre-2019 divorce agreements can be modified to apply the new rules to future alimony payments, provided the modification expressly states that the TCJA new tax treatment should apply.

Indeed, there could be situations where voluntarily modifying divorce agreements put in place before 2019 to apply the new tax treatment would benefit both parties. One example might be if the recipient spouse is now in a higher tax bracket than the payer-spouse. Consult with us to determine if such modification makes sense for your particular situation.

Unlike many other new provisions of the TCJA, which will sunset in 2025, the repeal of the alimony deduction is permanent. It will remain in effect unless Congress makes future changes to the tax code.

It’s important to note that these rules don’t just stand to affect those divorced after December 31, 2018. The repeal of the alimony deduction could also impact couples who’ve been divorced for years—and even those still happily married.

For example, those whose current divorce settlements were based around tax assumptions that no longer apply may want to renegotiate alimony payments to better align with the new tax code. Similarly, married couples who put prenuptial agreements in place based on the old tax rules should review those agreements to determine if the terms need to be altered in light of the new tax responsibilities.

By upending alimony procedures that have been in place for more than 70 years, the TCJA stands to completely reshape the divorce landscape. In turn, the law also stands to alter estate-planning and retirement strategies that were built around the previous tax advantages offered by the alimony deduction.

Whether you’re in the midst of a divorce, have been divorced for years, or are married with a prenup, it’s critical that you meet with us and qualified tax advisor to discuss how this provision of the TCJA stands to affect you.

Depending on your situation, you may want to modify your existing legal agreements to bring them into better alignment with the new rules. Or, there may be planning tools available that could offset or lessen the new law’s impact on your tax obligations. Schedule a Family Wealth Planning Session today to learn more.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.