HOW DO I PROTECT MY BUSINESS?
IN THE CASE OF DEATH OR DISABILITY, HOW DO I PROTECT MY BUSINESS AND MY COMPANY SHARES OF STOCK?
I recently got a call for a new Miami-Dade County Probate case. The husband called and said they were in the midst of a sale of their business and sadly, his wife died one week before the sale. The husband and wife decided to keep their shares of the company separate and thus own the company 50% in the wife’s name and 50% in the husband’s name. The business is worth a million dollars and they were selling it with their dreams of retiring, but now the husband may be in business with his wife’s kids.
This is a big problem as now the sale of the company gets put on hold and my guess is the buyer will not wait for this matter to be approved in probate court by the Judge assigned to the case. Moreover, the husband now stands to lose a piece of control of his company that he built with his wife. This is not their first marriage and the wife had two daughters from a previous marriage. If there is a will, then the shares will go as the will maps out for the probate attorney to prove to the probate court. If there is no will, then the business shares will be distributed by Florida Statute 732.102 which divides the wife’s assets 50% to the husband and the other 50% will go to the wife’s daughters. Therefore, the husband will own 75% of the business and 25% will be owned by the wife’s children. Thus, the wife’s children could object to the sale; causing major delays and difficulties for this current spouse who is merely trying to carry out their plan of selling the business. I bet they never expected that!
WHAT IS COMINGLING OF ASSETS AND HOW DO REVOCABLE TRUSTS PROTECT AGAINST THIS?
Comingling of assets are the mixing of ownership. For example, a husband and wife owning all of their assets together. This is examined more fully in the case of divorce and which assets get divided and how they are to be divided among the couple. In our case above, it appears that husband and wife wanted to keep their assets separate. This is common when there is a second or third marriage and kids from previous relationships. Keeping assets separate can be a good option in the case of divorce; yet, not as effective in the case of death. In the case of death, separate assets without a trust cause big problems. Especially in the example above, where the husband may be in business now with his wife’s children.
WHAT HAPPENS NOW? WHY IS PROBATE COURT IN MIAMI-DADE COUNTY REQUIRED?
Probate administration is required in Miami-Dade County because that is the county where the wife lived and died. Probate administration is required whether there is a will or no will, a spouse or no spouse. The only way to avoid probate administration is to hire an estate planning attorney to create a revocable trust and fund that trust or stated simply, put all of your assets that you own in your own name alone into that revocable trust.
ARE SEPARATE ASSETS WITHOUT A TRUST A GOOD IDEA?
Separate assets outside of a trust are not a good idea. As in the example case, it often leads to the need for hiring a probate attorney and beginning a probate administration. The process is expensive and can take up to a year or more to sort out all the assets.
HOW COULD THIS SITUATION HAVE BEEN PREVENTED WITH A REVOCABLE TRUST?
If the husband and wife had each done their own revocable trust and funded it properly, probate would not be needed. For example, after creating a trust for each of them, the attorney transferred the stock shares 50% into each of their trusts, they could now sell the business through the trustee. Thus, eliminating the unnecessary expense and delay and the need for probate court entirely.
WHY SHOULD YOU USE ALLY M. GLASER, PA TO HANDLE YOUR WILLS AND TRUSTS, ESTATE PLANNING IN MIAMI BEACH AND MIAMI-DADE AND BROWARD PROBATE MATTERS?
As a Miami Beach Estate Planning, Wills and Trusts, and Probate Attorney in Miami Beach with over twenty-three years of experience and both a Psychology and Law degree, I handle these matters with care and sensitivity. I am familiar and comfortable with both the Broward County and Miami-Dade probate court system and know how to get things done. Call or email me today to discuss your Estate Planning, Wills and Trusts, and Broward or Miami-Dade County Probate matters. I am happy to help you and your loved ones.