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Legendary hip hop artist DMX—born Earl Simmons—passed away on April 9 at age 50 after suffering a massive heart attack a week earlier at his home in White Plains, New York. The heart attack was reportedly triggered by a cocaine overdose on April 2, which left the rapper hospitalized in a coma. After a week of lingering in a vegetative state, his family made the decision to remove him from life support.

As we reported last week in part one, although DMX was wildly successful in both music and movies, the rap icon experienced serious legal and financial problems, along with frequent issues with drug addiction throughout his career. Having fathered 15 children with nine different women, DMX’s money issues largely stemmed from unpaid child support, but he also failed to pay income taxes, and both of these issues would land the rapper in prison and rehab on more than one occasion.

The combination of child support payments and back income taxes also left DMX deeply in debt. In fact, some estimates put DMX’s net worth at the time of death at more than $1 million in the red. However, as with other famous musicians, DMX’s overall net worth also included extensive recording and publishing royalties—valued at an estimated $17.7 million—so even though DMX’s estate will have to pay off his massive debts, there will likely be a fairly significant sum left for the late rapper’s children to inherit.

That said, on top of his failure to manage his finances, DMX also failed to create an estate plan. And as we’ll see below, this lack of planning has already ignited a court battle among the late rapper’s many potential heirs. Even worse, the rap icon’s lack of planning will likely mean that his fiancée, Desiree Lindstrom, the mother of DMX’s 15th child, son Exodus Simmons, will most likely inherit nothing from her late fiance’s fortune.

Although Desiree and DMX were in a relationship for seven years and raising their son together when he died, the two were never married. In an attempt to establish a claim to his estate, shortly following DMX’s death, Desiree petitioned the New York Supreme Court in an attempt to be legally declared his “common-law” spouse. But the court denied her request, which isn’t surprising given that New York hasn’t recognized common-law marriage since 1933. Had her request been approved, state law would give Desiree priority to control DMX’s estate as its administrator .

In light of the court’s ruling, Desiree will likely have zero say in how DMX’s estate is managed, and unless his other children consent, she likely won’t inherit any of his money either. And seeing that a court battle is already brewing among DMX’s oldest children over the administrator role, it’s doubtful that Desiree will be at the top of their minds when it comes to dividing up their late father’s assets.

Just a month after DMX’s death, five of his adult children petitioned the Westchester County Surrogate’s Court seeking to be named administrators of their late father’s estate. According to the New York Daily News, the first filing was made by DMX’s daughters Sasha Simmons and Jada Oden on May 10, while DMX’s three adult sons with Tashera Simmons—Xavier, Tacoma, and Sean—filed their petition to be appointed administrators on May 10.

Because DMX was unmarried and died without a will, New York law stipulates that his assets are to be equally divided among his 15 children. However, it’s unclear just how much wealth there will be to go around after all of DMX’s debts to the IRS and other creditors are paid off.

In their court filings, his daughters estimated the worth of DMX’s estate at less than $50,000, while his sons put the value at less than $1 million. Media reports of DMX’s net worth at death also vary widely, but they all show him deeply in the red. Celebrity Net Worth, for example, puts his net worth at negative $1 million, while MoneyInc estimates his total net worth was a whopping $10 million in the red.

If DMX was so deeply in the hole, you might wonder why his children would be in such a rush to be named administrator of his estate. While each of DMX’s children stand to inherit an equal share of his assets under the law, his older kids are likely vying for the administrator role in order to gain control over the estate’s future earnings.  Upon his death, Billboard estimated that DMX’s total music and publishing royalties were worth $17.7 million, and given the rap star’s popularity and extensive catalogue, those assets are likely to steadily increase in value as the years go by.

Whoever is eventually appointed to administer DMX’s estate will not only be paid a commission, but more importantly, that person will also be in charge of making all of the estate’s future business and financial decisions. Furthermore, the administrator will also be in charge of reviewing and approving the claims of competing heirs. With such power and money on the line, it’s not surprising so many of DMX’s children are jockeying for the administrator role.

Unfortunately, as we’ve seen with both Prince and Aretha Franklin, such family disputes can last for years, tearing the family apart, costing the estate millions in legal fees, and exposing the family’s private lives to tabloid headlines. And in the end, the court may decide to avoid causing a family squabble by appointing a neutral third-party administrator to manage DMX’s estate, leaving a total stranger in control of his life’s work.

The saddest part of this whole situation is that virtually all of the conflict, expense, and trauma that DMX’s loved ones are likely to endure could have been easily prevented with straightforward estate planning. Using revocable living trusts, for example, DMX could have ensured that his children and fiancée would have immediate access to his assets upon his death or incapacity, avoiding the need for court involvement altogether and keeping the contents and terms of his estate totally private.

At the same time, using special asset protection trusts, DMX could have named a person, or persons, of his choice—rather than a person chosen by the court—to manage his music and publishing assets upon his death, thereby ensuring DMX’s artistic legacy is honored and preserved in the exact manner the rap legend would want. Furthermore, DMX could have used asset-protection planning to minimize his tax liability and shield his recording and publishing royalties from creditors in order to maximize his estate’s future revenue potential and guarantee his loved ones a source of income for generations to come.

Finally, DMX’s story highlights the vital importance of incapacity planning. Estate planning is about more than planning for your eventual death; it’s also about planning for a potential incapacity from accident or illness.

In DMX’s case, his incapacity was brought on by a cocaine-induced heart attack, and he lingered in a coma for a week before being removed from life support. Because he didn’t have any planning in place, DMX’s mother, Arnette Simmons, was reportedly put in charge of making all of DMX’s medical decisions, including the ultimate decision to remove him from life support. And as we reported last week, this is the same woman who is said to have abused DMX when he was a child.

While DMX reportedly reconciled with his mother in recent years, he may have preferred to have someone else—like his fiancée Desiree—in charge of making life and death decisions for him. Additionally, although DMX’s mother and children were reportedly cordial with Desiree while he was hospitalized and did allow her to visit him, because they weren’t married, his family could have just as easily denied Desiree the right to see DMX during his final days. DMX could have prevented all of this with proper estate planning.

Through a medical power of attorney, DMX could have granted an individual of his choice, such as his fiancée, Desiree, the immediate legal authority to make decisions about his medical treatment in the event of his incapacity. And with a living will, DMX could have provided detailed guidance about how his medical decisions should be made during his incapacity. Such guidance could include instructions for everything from who should be allowed to visit him in the hospital and what kind of food he would want to specifying if and when he would want life support removed.

While advance healthcare directives like medical power of attorney and a living will are the foundation of any incapacity plan, for truly comprehensive incapacity planning, your estate plan may also require other planning vehicles, such as a durable financial power of attorney and living trusts. Meet with us, your Personal Family Lawyer® for support in putting in place an incapacity plan that’s right for your particular situation.

Regardless of your financial status, planning for your potential incapacity and eventual death is something you should take care of immediately, especially if you have children. As we saw with DMX, you never know when tragedy may strike, and through estate planning, you can save your family from needless disputes, expense, and embarrassing public exposure.

Beyond just passing on your material assets to your loved ones when you die, estate planning is also critical to ensure you’ll be properly cared for in the event of your incapacity from illness or injury. And when done right, estate planning doesn’t just help you plan for incapacity and death, but makes your life better as well by giving you the peace of mind of knowing you’ve made the right legal and financial decisions for yourself and those you love.

Whether you already have an estate plan created or nothing at all, meet with us, your Personal Family Lawyer®,to discuss the specific planning strategies best suited for your asset profile and family dynamics. With our guidance and support, we can ensure that your loved ones will stay out of court and out of conflict no matter what. Contact us today to schedule an appointment.

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.

Limit employee access to company computers and servers containing sensitive customer data to only those team members who actually need it. This is most often done with password protection and password sharing applications. Password sharing apps, like LastPass, allow you to share passwords with your team without actually displaying those passwords across cyberspace.

Beyond electronic access, also limit physical access to computers, servers, and other devices that store such data. This can mean installing access controls, keeping hardware in secure off-site locations, and/or storing devices in locked rooms and cabinets when the office is not in use. Be sure to also inventory all devices that store client data to ensure they haven’t been stolen or misplaced.

Anti-virus software, firewalls,  intrusion prevention systems, anti-subversion software—these security systems and others like them should be used to protect your company’s server and computers. The key is to add as many layers of security as possible, since hackers are likely to move on to an easier target, if your network and devices are particularly well defended.

And don’t forget to regularly install updates and upgrades to your security software, so you’ll be defended against the latest viruses and malware. Regularly check your software vendors’ websites and the U.S. Computer Emergency Readiness Team’s (UC-CERT) site to stay up-to-date on the latest threats, vulnerabilities, and patches.

Web hosts are businesses that host your website and data on their own off-site servers. These servers tend to be fairly extensive and may host hundreds—and even thousands—of websites on the same machines. There are numerous web host businesses out there, but they come with varying levels of server-side protection, including things like security cameras, different types of anti-virus and anti-spyware systems, and hard-wired firewalls.

Be sure you select a web host that offers a high level of security, especially against cross-side server attacks, which involve hackers who open a fake account with the company to access other websites on the same host server. For enhanced protection, use a virtual private server (VPS), which partitions your website from other sites that share the same server.

For maximum protection, open a private server account in which your website and data are maintained on your own separate server. This option is pricey, but still a lot cheaper than getting fined and/or sued for a data breach.

While your normal IT guy or gal may be able to offer you a minimal level of protection, it may be best to hire a seasoned security professional to monitor your company’s server and computer activity. These experts will be specifically trained in the latest trends in hacking and other electronic infiltration methods, offering the most effective safeguard for your customer information.

However, these IT security professionals are quite expensive, so as your Creative Business Lawyer®, we’ll help you think through the risk and reward of hiring one and advise you on whether your company requires such an investment or not.

If your computers or servers are hacked and your data is compromised and/or stolen, immediately contact your customers to let them know. Not only will this allow clients to take steps to protect themselves, like closing their vulnerable accounts or alerting their financial institutions to be on the lookout for suspicious activity,  but it’s also required by state and federal data breach laws.

As a business owner, you’ll need to stay apprised of the latest legal requirements for protecting your sensitive client data. As your Creative Business Lawyer, we can advise you on what safeguards you should have in place and how to implement them. And if you’re ever hacked, we’ll defend you in court against any lawsuits and/or penalties that might result. Contact us today to learn more.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

It’s estimated that one-in-three small businesses is sued or threatened with a lawsuit at some point in its life cycle. And even if you end up winning the suit, the price of defending yourself in court can be massively expensive in terms of lawyer fees and court costs.

Seeing that you face potentially ruinous risks even if you’ve done nothing wrong, you should definitely invest in business liability protection—not only to protect your company’s assets but your personal assets as well. When it comes to protecting your assets from liability, there are a couple different angles to consider.

Two of the most effective forms of liability protection are liability insurance and limited liability business entities, such as limited liability companies (LLCs) and corporations. Because they both offer forms of liability protection, you may think liability insurance and business entities cover pretty much the same thing, but that’s not really the case.

While they both minimize financial losses as the result of lawsuits, they actually serve two distinct purposes. Given this, many business owners find their best option is to put both liability insurance and a limited liability entity structure in place. And here’s why:

Liability insurance is straightforward: You buy a certain amount of insurance coverage from a broker, and the policy pays out (and hires you a lawyer) if you’re ever sued. When you purchase liability insurance, it’s primary purpose is to protect your company’s assets—real estate, business equipment, financials—in the event of a claim or lawsuit.

Liability insurance comes in a few forms:

• There’s general liability insurance, which protects your company from common legal issues due to accidents, injury, and negligence. If you don’t have general liability in place, you could lose your entire company if someone is seriously injured on your property and sues for damages.
• Next up is product liability insurance, which is a more specific type of coverage. Product liability protects companies that manufacture or sell products that can be sued over the safety of those products. So if someone claims your product contributed to their injury, you’ll likely end up spending lots of money to defend yourself, regardless if you win or lose the case.
• Professional liability insurance covers certain types of service-based businesses. Specifically, it protects against mistakes made by service providers that harm their clients. Some professionals, such as doctors, are legally required to have such coverage. Others, like lawyers, aren’t required to have it (except in Oregon), but it’s so risky not to, most get it anyway.
• Employment practices coverage is a type of liability insurance that provides protection if you’re sued for anything related to one of your employees. While this is an often-overlooked coverage, it’s actually one of the most important, since employment claims are a huge risk to your business.
• And, on top of all of that, you may want an umbrella policy that would cover you for any damages in excess of your individual policies. Umbrella coverage is typically inexpensive and a good idea to have as a backstop.

Given the litigious nature of our society, liability insurance is an absolute must for every business. That said, such policies come with a few limitations. For example, if the lawsuit exceeds your policies’ total coverage limits, you’re responsible for anything beyond that. Or if your insurance agent finds that your coverage doesn’t protect against the specific nature of your claim, you’re on the hook for the whole enchilada.

While liability insurance is aimed at protecting your business assets, a limited liability entity is specifically designed to protect your personal assets. Business entities like LLCs and corporations (when maintained properly) can protect your personal assets if your business is ever sued or falls into serious debt.

For instance, if your company is an LLC and doesn’t have enough money to pay its debts, creditors can’t come after personal assets like your life savings and/or home, unless you’ve signed a personal guarantee to secure the debt. Similarly, if your company is sued and your liability insurance coverage isn’t enough to cover the full cost of the lawsuit, the LLC will prevent  claimants from going after your personal assets to make up the difference.

Business entities effectively form a shield between your business and personal assets, which can be impossible to get through as long as the entity is set up and maintained properly. Yet limited liability entities come with some limitations of their own.

For example, while a business entity protects your personal assets, it does not protect your business assets. So if your LLC fails, creditors can come after all of your company’s assets in order to pay the debt—just not your personal assets. As we saw earlier, protecting your business assets is what liability insurance is for.

Because liability insurance and business entities work together in this way to cover their respective limitations, many entrepreneurs put both in place for maximum protection. Yet, even though liability insurance is an absolute must for all companies, not every business will require a limited liability entity structure.

If you’d like us to help you evaluate your insurance coverage and/or determine which type of business entity is right for your company, contact us to learn more.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Dealing with the financial stressors of caring for an aging loved one can affect your ability to provide them with the care and compassion they need. It can also put the security of your financial future at risk. To mitigate these concerns, consider these useful tips to help you make informed decisions about how to protect your retirement while caring for senior parents.

Many adult children end up putting their professional lives on hold to become a primary caregiver for their elderly parents. Financial experts advise against this because of the sudden loss of income and valuable benefits. Consider caregiving options that support your ability to maintain your earning potential.

Review the actual costs of being a primary caregiver before making any drastic changes like leaving your job. Also, consider whether your loved one’s assets can be utilized to cover some of the costs involved in providing care inside or outside the home.

Free or low-cost benefits that can help cover some of the costs of caregiving, such as home health aides, are often available to seniors. Similarly, review the limitations of public benefit options such as Medicare and Medicaid.

It is common for seniors to prioritize remaining in their own home while they age. Although understandable, this can be a very expensive, and often unrealistic option. If opening your home to your loved one is an option, it can be far less expensive.

Geriatric care managers can help you establish a caregiving plan that meets your needs and assist you in identifying resources to save time and money.

Financial elder abuse is on the rise, so make sure your loved one’s finances are protected. Telephone, postal mail, and internet fraud is common and can be easily avoided when a close relative or friend is keeping tabs on the accounts of a senior loved one. Consider talking with your parents about stepping down as Trustee of their trusts and letting you step in now to monitor their finances, and if they do not have a Trust holding title to their accounts, meet with us now to look at whether it makes sense to set that up for them (and for you).

Estate planning is often considered something you only need to worry about once you get married. But the reality is every adult, regardless of age, income level, or marital status, needs to have some fundamental planning strategies in place if you want to keep the people you love out of court and out of conflict.

In fact, estate planning can be even more critical for unmarried couples. Regardless if you’ve been together for decades and act just like a married couple, you likely aren’t viewed as one in the eyes of the law. And in the event one of you becomes incapacitated or when one of you dies, not having any planning in place can have disastrous consequences.

If you’re in a committed relationship and have yet to get—or even have no plans to get—married, the following estate planning documents are an absolute must: 

If you’re unmarried and die without planning, the assets you leave behind will be distributed according to your state’s intestate laws to your family members: parents, siblings, and possibly even other, more distant relatives if you have no living parents or siblings. The state’s laws would provide NO protection for your unmarried partner. Given this, if you want your partner to receive any of your assets upon your death, you need to—at the very least—create a will.

A will details how you want your assets distributed after you die, and you can name your unmarried partner, or even a friend, to inherit some or all of your assets. However, certain assets like life insurance, pensions, and 401(k)s, are not transferred through a will. Instead, those assets will go to the person named in the beneficiary designation, so be sure to name your partner as beneficiary if you’d like him or her to inherit those assets.

However, there could be an even better way.

Although wills and beneficiary designations offer one way for your unmarried partner to inherit your assets, they’re not always the best option. First and foremost, they do not operate in the event of your incapacity, which could occur before your death. In that case, your partner may not have access to needed assets to pay bills, or he or she could potentially even be kicked out of your home by a family member appointed as your guardian during your incapacity.

Moreover, a will requires, a court process that can take quite some time to navigate. And finally, assets passed by beneficiary designation go outright to your partner, with no protection from creditors or lawsuits. To protect those assets for your partner, you’ll need a different planning strategy.

A far better option would be to place the assets you want your partner to inherit in a living trust. First off, trusts can be used to transfer assets in the event of your incapacity, not just upon your death. Trusts also do not have to go through, saving your partner precious time and money.

What’s more, leaving your assets in a continued trust that your partner could control would ensure the assets are protected from creditors, future relationships, and/or unexpected lawsuits.

Consult with us for help deciding which option—a will or trust—is best suited for passing on your assets.

When it comes to estate planning, most people focus only on what happens when they die. However, it’s just as important—if not even more so—to plan for your potential incapacity due to an accident or illness.

If you become incapacitated and haven’t legally named someone to handle your finances while you’re unable to do so, the court will pick someone for you. And this person could be a family member, who doesn’t care for or want to support your partner, or it could be a professional guardian who will charge hefty fees, possibly draining your estate.

Since it’s unlikely that your unmarried partner will be the court’s first choice, if you want your partner (or even a friend)  to manage your finances in the event you become incapacitated, you would grant your partner (or friend) a durable power of attorney.

Durable power of attorney is an estate planning tool that will give your partner immediate authority to manage your financial matters in the event of your incapacity. He or she will have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting government benefits, selling your home, as well as managing your banking and investment accounts.

Granting a durable power of attorney to your partner is especially important if you live together, because without it, the person who is named by the court could legally force your partner out with little to no notice, leaving your partner homeless.

We can guide you to make informed, educated, and empowered choices to protect yourself and the ones you love most.

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.