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December 20, 2021 In Contracts, Estate Planning

Do It Yourself Legal Documents Can Cost You Big

Loved ones are fighting a prolonged court battle after the former Zappos.com Inc. CEO, Tony Hsieh, joined a long list of prominent celebrities who died without leaving a Will. As when Prince died without a Will, the court has said the CEO died intestate, the legal term used when someone died without a Will.  But courts can still determine that you died intestate even if you tried to draft your own Will.

We see many cases involving individuals who thought “drafting my own contract” or “drafting my own Will” sounded like a good plan.  There are many reasons you may want to draft your own contracts or create your own Will.  It can be a desire to maintain privacy and control, save money on attorney fees, or simply thinking you don’t have enough assets to justify the costs.  Unfortunately, he pitfalls of drafting your own contracts or drafting your own Will are numerous.

 

Common problems with drafting your own contracts can include:

 

    • Failing to Account for Licensing Requirements – Many industries have specific requirements for licensing that come with specific statutory limitations and consequences. Failing to account for these can result in an unenforceable contract, jeopardize your license, or require you to double pay for services.  https://pattersonbray.com/construction-contract-proper-license/
    • Paying More After the Other Party Breaks the Contract – If someone fails to live up to their end of the bargain, you can take them to court. But you’ll still have to pay your attorney out of pocket, even if you win.  An experienced small business attorney can make sure your contracts give you the best chance of recovering your attorney fees after you win.  https://pattersonbray.com/small-business-tip-contracts-attorney-fees/
    • Failing to Use the “Magic Words” – If you don’t clearly spell out your intentions in a contract, then you run the risk of having a judge decide what your agreement means. Some types of contracts are required to be made in writing for this very reason.  A few types take this a step further and require precise words to be used in order for the contract to be enforceable.  Knowing the different standards can be the difference between your small business’s “big break” and a piece of scrap paper. https://pattersonbray.com/get-it-in-writing-a-handshake-probably-wont-do/

 

Common problems with drafting your own Will can include:

 

 

Do it yourself legal documents come with a cost.  Avoid the dangers of do it yourself legal documents by checking out our team at Patterson Bray for your small business or estate planning needs.  Please call us at 901-372-5003 or email us here. We have offices in Memphis and Nashville TN.

January 20, 2021 In Civil Litigation, Estate Planning, General

The 27th Edition of The Best Lawyers in America© Recognizes Attorneys Lindsay Jones and Will Patterson

Patterson Bray is pleased to announce that attorneys Lindsay Jones and Will Patterson were recently selected by their peers for inclusion in the 27th Edition of The Best Lawyers in America©.

probate lawyer in memphisLindsay Jones was recognized for her high caliber of work in the practice areas of Trusts and Estates and Litigation- Trusts and Estates.

 

 

Will Patterson was recognized for his high caliber of work in the practice area of Commercial Litigation.

 

 

For more than three decades, Best Lawyers has been regarded – by both lawyers and the public – as the most credible measure of legal integrity and distinction in the United States. As such, Lindsay and Will’s recognition by Best Lawyers symbolizes excellence in practice.

Inclusion in Best Lawyers is based on a rigorous peer-review survey comprising more than 9.4 million confidential evaluations by top attorneys. Best Lawyers’ founding principle remains unchanged and forms the basis of their methodology: The best lawyers know who the best lawyers are, and attorneys do not pay to participate or be recognized. Best Lawyers lists are published in top-tier business and legal publications such as The Washington Post, The Wall Street Journal, and The New York Times.

For more information, check out the Best Lawyers website.

 

 

February 16, 2019 In Estate Planning

Why Is It Beneficial that Trusts Avoid Probate?

Memphis Probate and Estate Administration Lawyers

It can be difficult to know exactly how to construct an estate plan that will protect your family and keep your family from potentially destructive in-fighting. Thankfully, you do not have to determine the best ways to move forward alone. An experienced estate planning attorney will be able to help you decide which legal and financial tools will most directly benefit you, your family, your assets and your family’s future. And if you are concerned about the possibility of family in-fighting over your estate, your estate planning attorney will likely have one primary suggestion for you: consider setting up a trust.

Trusts and Probate: The Basics

When individuals pass away without first constructing legally enforceable estate plans, their assets pass through a legal process known as probate. The probate process essentially distributes the assets of a deceased person in accordance with the state’s estate-related regulations. This seems like a harsh way to deal with a lifetime’s worth of sentimental and potentially financially valuable property. But absent clear directions about how an estate should be managed, this process is really the only alternative the state can employ that is as broadly “fair” as possible.

One of the reasons why trusts are such an attractive legal and financial tool is that they are not subject to the probate process. They are constructed in such a way that the state cannot generally question how they should be managed. As a result, there can be little reason for in-fighting among loved ones overwhelmed by the process of probate – because there is no stress of probate associated with the management of trusts.

In addition to the benefit of avoiding probate, assets governed by trusts generally benefit from a level of privacy and control not possible when property is passed along by a simple will. For all these reasons and more, it may benefit you and your family to discuss the idea of creating a trust when you next speak with your estate planning attorney.

Estate Planning Guidance Is Available

If you have questions about trusts, probate or estate planning generally, please do not hesitate to schedule a consultation with an experienced estate planning attorney at your earliest convenience. Planning ahead for how your estate will be managed once you are gone can be an intimidating process. It is not easy to think about a time when you will not be able to provide for your loved ones in the ways you do now. However, by planning ahead and helping to ensure that your wishes are clearly stated, properly constructed and legally enforceable, you will save your loved ones from a great deal of stress after you are gone. And depending upon your financial circumstances, the ways in which you prepare your estate now may help to ensure that your loved ones are provided for long into the future.

Please consider scheduling a consultation with an experienced estate planning attorney today. None of us knows when our estate plans will become truly urgent business. And while it is not easy to begin the process of estate planning, working with experienced Memphis probate and estate administration lawyers will help to ensure that it is an effective and successful process in the end.

Contact Patterson Bray for their insight into estate planning and the benefits of avoiding probate.

August 31, 2018 In Estate Planning, General

No estate plan: a lesson from the extraordinary life of Aretha Franklin

No estate plan: a lesson from the extraordinary life of Aretha Franklin

It’s been widely reported that Aretha Franklin, The Queen of Soul, died without any sort of Estate Plan leaving many people wondering: “Why would someone so successful not have a financial plan in place?”  We should all pause and THINK about what we’re trying to do with our assets after death.

Unfortunately, it is fairly common for people to die without even the simplest form of an Estate Plan.  Even tremendously successful individuals like Prince and Aretha Franklin have made this mistake.  While Prince and Aretha Franklin certainly have more complex financial affairs than most of us, Estate Plans are not just for rich people.  In fact, a basic plan can be relatively inexpensive, especially when you consider the potential legal fees and costs which arise when there is no plan at all.

WHY HAVE A WILL OR ESTATE PLAN?

Whether we are meeting with potential clients or giving estate planning seminars, we always stress the importance of having an estate plan in place no matter how simple the plan might be.  Even a simple Estate Plan gives your family guidance and allows them to R-E-S-P-E-C-T your wishes.

The only way you can be sure to “get what you want” is to properly (and legally) communicate your wishes. Simply telling someone won’t cut it. After all, neither a judge nor your family will be able to ask you after your death.  Having a plan in place can also help prevent family fights. You may think your family would never fight over your assets after you die. You may be right, but you may also be wrong. There’s no good reason to take a chance. Make your wishes so clear that your family members have nothing to fight about after your death.

An Estate Plan is important irrespective of your financial situation. You do not have to be rich or famous to need a Will. Even if you think you don’t have enough assets to justify an Estate Plan, it is likely that your possessions have real meaning to family members or friends.

WHY PEOPLE DON’T HAVE A WILL OR ESTATE PLAN.

Typically, people put off planning because they are “too busy” or they simply do not want to think about their own mortality. Death can be an unpleasant topic.  It is obviously an uncertain event which makes it is easy to put off and left for another today. However, death is an unfortunate reality for everyone.  As such, we should all learn a lesson from Aretha Franklin’s mistake and plan ahead.

WHAT HAPPENS IF SOMEONE DIES WITHOUT A WILL?

If you don’t have an Estate Plan or Will, your Estate may become subject to state law and Probate Court orders. This is likely to lead to family arguments and legal fees and costs, which in the end reduces the amount of assets remaining for your family members.

NEED A TENNESSEE ESTATE PLANNING LAWYER?

We work hard to make setting up your Estate Plan as easy as possible.  Basic plans can be relatively inexpensive even though they are drafted with your specific needs and concerns in mind.  If you do not have an Estate Plan or have not had your plan reviewed in a number of years, you need an Estate Planning lawyer Memphis trusts to guide you through the process.

Call Patterson Bray at 901-372-5003.

August 31, 2016 In Estate Planning

IRS Eliminates Valuation Discounts for Family Owned Entities: TAKE ACTION NOW!

 

 The IRS Has Issued Regulations Limiting or Eliminating the Use of Valuation Discounts.

One of the key benefits of Family Entities over the last several years has been the opportunity for significant valuation discounts for estate and gift tax purposes for clients with taxable estates. Last year, we advised  in our Estate Planning Newsletter that we expected the IRS to issue regulations limiting or eliminating the use of valuation discounts for family owned or controlled entities. Earlier this month, the IRS finally issued those proposed regulations. The  regulations are set to virtually eliminate the use of family entity valuation discounts as an estate planning tool.

However, there is still time to take advantage of valuation discounts. But, you need to act now. 

What is a Family Entity?

A Family Entity is exactly as it sounds — a company (limited liability company, corporation or partnership) that is owned and controlled by the organizer and the members of his or her family.

What Are Valuation Discounts?

Traditionally, ownership interests of a Family Entity have been valued at a reduced or discounted value. The basis for the discount is lack of control, lack of marketability, and other factors that result from the entity structure.  An ownership interest in a Family Entity is often valued at 20%-40% less than the actual fair market value of the underlying asset. This means that you could transfer an asset to a Family Entity and then later transfer your ownership interest in the Family Entity (either through lifetime gifting or at death) at a value significantly less than the fair market value of the underlying asset.

The use of family entities to obtain valuation discounts is a well-tested Estate Planning tool. Other methods of Estate Tax Planning often do not provide the same benefits. Because this method of estate and tax planning has proven so effective, it is imperative that clients with potentially taxable estates take advantage of Family Entity Valuation Discounts before the new IRS regulations take effect.

What’s the Hurry?

Entities created and funded prior to the enactment of the new IRS regulations will be governed by the current (more favorable) rules. But, there is very little time left to take advantage of Valuation Discounts. While it is not yet clear exactly when the new regulations will become final, many Estate Planning Attorneys believe they could become effective as soon as December 1, 2016.  No one can be certain of the date, which is why you should act now.

Our Advice to You

  • We recommend that any client wishing to take advantage of Family Entity Valuation Discounts as an Estate Planning strategy do so well before December 1, 2016.
  • If you already have a Family Owned Entity, this is a good time to consider whether additional gifts or sales of ownership interests would be beneficial in order to maximize the value of the gift or sale.
  • Anyone with a current Family Entity should contact us  to discuss taking further advantage of the current IRS regulations.
  • If you are concerned about the value of your estate for Estate Tax purposes or  if you are interested in learning more about Family Entity Valuation Discounts, please contact us at (901) 372-5003 or email us here so we can determine if a Family Entity can yield significant tax and other benefits for you and your family.
July 18, 2016 In Estate Planning

Digital Assets: Who can access my online accounts if I die?

Digital Assets: Who can access my online accounts if I die?

Chances are, if you are reading this Blog Post, you own Digital Assets and have one or more online accounts.  As Estate Planning Lawyers, we continue to see changes in the law to address our increasingly tech-savvy culture. The use of electronic information has continued to play a larger role in the Estate Planning and Administration we do for our clients.

Have you ever thought about what might happen to your Facebook account if you died?  Who would get your iTunes library and how would they access it?

Tennessee Legislature Passes Revised Uniform Fiduciary Access to Digital Assets Act

The Tennessee legislature recently passed the Revised Uniform Fiduciary Access to Digital Assets Act (the “Act”), which became effective July 1, 2016. The intent of the Act is to aid in a Fiduciary’s ability to access an individual’s Digital Assets.  A Fiduciary is someone either appointed by a person or a Probate Court Court to act on behalf of the person in the event of incapacity or death.  A fiduciary may be appointed by a person in a Power of Attorney or Last Will and Testament, or by a Court in a guardianship, conservatorship, or intestate estate proceeding.  The Act also attempts to protect a person’s privacy, as it also allows the person to restrict a fiduciary’s access to digital assets, and provides additional safeguards by allowing the Custodian of the asset to request certain documentation before providing requested information. A fiduciary granted access to digital assets is held to a fiduciary standard under the Act, requiring the fiduciary to act in the best interests of the person with a duty of care, loyalty and confidentiality.

What are Digital Assets?

The Act defines Digital Assets as “an electronic record in which an individual has a right or interest,” and this “does not include an underlying asset or liability unless the asset or liability is itself an electronic record.”  The Act does not necessarily grant the fiduciary access to a person’s cell phone, computer, tablet, etc., but this class of assets includes a wide variety of items, including:

  • assets from Twitter and Facebook accounts
  • assets such as PayPal accounts
  • iTunes accounts
  • Accumulated frequent flyer miles
  • Online banking or trading accounts.

How is Access Granted?

The Act lays out specific requirements as to how the fiduciary must go about requesting access to the digital assets depending on the nature of the fiduciary representation, the type of document (if any) granting the fiduciary the authority to access digital assets, and the depth of the information needed by the fiduciary.

What Should I do about my digital assets and online accounts?

Granting a fiduciary the authority to access your digital assets (or limiting their access) should be done with specificity.   You can and should address these issues in your Last Will and Testament and Power of Attorney.  You should also make sure that any usernames, passwords, and account numbers for your digital assets and online accounts are in a safe place so that your fiduciary can get this information and provide it if requested by a custodian (such as the bank, Facebook, etc.).

If you are concerned about your appointed fiduciary’s current potential access to your digital assets, you should consult with an attorney experienced in fiduciary matters, who can review the relevant documents and properly advise you about your specific situation.

What if I need access to someone else’s online accounts?

If you are currently in a fiduciary position and you need to obtain access to that person’s digital assets or records or online accounts, please be sure to consult with an estate planning attorney to find out how you should go about obtaining this information/access, because the procedures can differ based on your fiduciary role, the powers you have been granted, and the type of information you are trying to obtain.

Let us help you

Our Estate Planning Attorneys can help develop a digital assets plan to best suit your individual needs.  Visit our website to learn more about our work and call us today at 901-372-5003.

July 11, 2016 In Contracts, Estate Planning

Joint Property Ownership Pitfalls and Solutions

Joint Property Ownership Pitfalls and Solutions

Our law firm has worked on a couple of cases lately involving joint property ownership; that is, property owned by a group of several individuals. Owning a piece of land or real estate with a group of individuals or family members can lead to many problems, a few of which we will discuss here.

What Happens to Real Estate When a Person Dies?

In Tennessee, real property typically passes outside of Probate in accordance with the publicly recorded property documents in the County where the property is located.  A person can also plan for the disposition of real property in a Will or Trust.  If you die owning real property in your sole name, though, it can cause significant problems for your Beneficiaries that can be avoided by proper planning.

In both cases I mentioned above, the group of individuals came into joint property ownership because of intestate succession (i.e., dying without a Will).  You may think that you do not need a Will because your property will pass to your heirs regardless.  However, there are many problems and burdens that your heirs will face if property passes to them through intestate succession.  Here’s what can happen if a landowner dies without a Will:

  • Land may pass to heirs who do not wish to be landowners.
  • Land may pass to heirs who do not know that they are now landowners (i.e. lost heirs).
  • Land may pass to heirs who are not prepared for the responsibility of owning real estate (i.e. paying real estate taxes, maintaining insurance, upkeep of the property)
  • If there is a mortgage, payments may be required very soon after the death of the original owner and before any inherited owner has a chance to determine how to address the new ownership – i.e. sell the property, allow it to be foreclosed upon, etc.
  • The title to the property will be unclear and extra effort will be required to determine all legal owners in a joint property ownership situation. It can be very difficult to locate heirs and to determine with certainty who all owns a piece of property, especially if some of the original heirs have died, or if the family isn’t in close contact or is spread across the country. A title search may be required, and title searches can be expensive.

Increased Costs for Inherited Owners

When a piece of property passes through intestate succession, when ownership is unclear, or when a piece of property is owned by a large group of individuals, there will be extra expense involved when the property is sold. As a general matter, the entire sales process will take longer than usual. Each separate legal owner must be found and consulted with.  Then, each owner must agree to all parts of the sale process (i.e. negotiating the price, negotiating and completing repairs, and signing all required paperwork).  It can be very difficult getting a group of family members or individuals to all cooperate and agree during the course of a real estate transaction.

Inherited owners who want to sell property can expect to have to do some additional work with the buyer’s title company such as filing probate documents, getting releases from TennCare, and dealing with potential creditors of the deceased person.  A title company may require proceeds to be escrowed for up to a year after the deceased person’s death.

Legal Issues of One Owner Can Affect Other Owners

Inherited and multiple owners can also come with their own personal problems.  A judgment lien or a bankruptcy filing of one inherited owner will immediately attach to the inherited property, which could cause delays and problems for any co-owners wishing to sell the property.

Ways to Avoid Common Problems of Joint Property Ownership

If you must own property with a group of individuals or family members, or if you desire to pass property to a group of people, there are ways you can accomplish joint property ownership which lessen the burden and expense involved. Speak with an Estate Planning Attorney or Property Lawyer about the best way to achieve your personal goals. For example, more effective “joint ownership” can be achieved in the following ways:

  1. Own as Joint Tenants with Rights of Survivorship. This type of ownership is common with married couples, but it can also be used with any individuals wishing to create this type of joint tenancy.  Upon the death of one joint tenant, the remaining tenant owns the property outright.  This results in protection from a debtor-tenant’s creditors because liens can only attach to the right of the debtor-tenant, which is nothing more than a “potential survivorship right.”  This protection ends if the non-debtor tenant dies and the debtor- tenant then owns the property outright.  One negative of this type of ownership is that the property will only pass to the other joint tenant, so the Estate of the first to die loses any equity to pass on to other individuals.  In addition, potential gift tax issues may arise since the Grantor is “gifting” rights to the property to the person they are creating a joint tenancy with.
  2. Own the Property in a Limited Liability Corporation.  Ask a business organization attorney about property ownership through an LLC. The rights of the members will depend on the structure of the LLC. Creating an LLC requires maintenance of paperwork to the State to keep the LLC active which will be required if the LLC wants to sell the property.
  3. Put the Property Into a Living Trust.  This is achieved by conveying the property to a Trustee on behalf of a Trust. (A Trust itself can’t own property; rather it must be an individual Trustee on behalf of the Trust.)  The property will then be maintained and distributed in accordance with the Trust Agreement.  A Living Trust allows the Grantor to make changes during his or her lifetime (therefore keeping control and autonomy) but also allows for the streamlining of management and an easy transition of the property upon the death of the original Grantor.  The successor Trustee can sell or manage the property outside of Probate, and depending on the Trust terms, without the input of or disruption to the Beneficiaries.

Beneficiary Deeds

Tennessee does not offer this, but some states allow the use of a Beneficiary Deed to clarify how a property is to pass upon the owner’s death. Essentially, a Beneficiary Deed lets a person name a beneficiary and only takes effect upon the death of the owner. Ask your Estate Planning Attorney about the availability of Beneficiary Deeds if you own property in multiple states.

Right to Partition

If you are tied up in joint property ownership, or if you own a piece of property with a group of individuals or family members and you want to end the relationship and go your separate way, you can. In Tennessee, you have the legal right to what is called “partition.” Speak with a civil litigation attorney about filing a partition lawsuit. In this kind of lawsuit, you ask the judge to partition the property, either “in kind” or “by sale.”

Need Help with a Property Ownership Issue?

Have questions about joint property ownership or other real estate issues? Please call us at 901-372-5003 or send Patterson Bray an email.

June 13, 2016 In Estate Planning

Don’t be like Prince: Get a Will.

Learning from Prince’s Mistake

It’s been widely reported that Prince probably died without a Will. This has left many people wondering:

How could someone rich and famous like Prince die without a Will?

Unfortunately, it is not uncommon for people, even the super-wealthy, to to die without even the simplest form of an Estate Plan. While at least one source reports that Prince’s Estate may be worth less than what people think, this surprising omission of someone of Prince’s celebrity status should give us all cause to stop and think about what might happen to our own families and hard-earned assets in the event of an untimely death.

2 Simple Reasons to Have a Will or Estate Plan

When we meet with potential clients and give basic estate planning seminars, we stress the importance of having, at the very least, a basic estate plan in place. This is important because:

1. Your wishes will be known. Have you ever tried to guess what another person wants? This is why many of us find Christmas shopping very stressful. The only way you can be sure to “get what you want” is to properly (and legally) communicate your wishes and desires. Just telling someone won’t cut it. After all, neither a judge nor your family will be able to ask you after your death.

2. You can help prevent family feuds and division. You may think your family is so tightknit that they would never quarrel over your assets after you die. You may be right, but you may also be wrong. Why take the chance? Make your wishes so clear that your family members have nothing to fight about amongst themselves after your death.

An Estate Plan is important regardless of your financial status. You do not have to be “rich” to need a Will. Even if you think you don’t have enough assets to justify planning ahead, it is likely that your possessions have real meaning to family members or friends. It is also likely that you have a larger Estate than you may realize.

2 Simple Reasons People Don’t Have a Will or Estate Plan

1. Fear of Losing or Giving up Control. Like Prince, many people like to retain complete control over their assets and business affairs. There’s not a thing in the world wrong with this. However, having an Estate Plan does not mean that you lose control! In fact, Estate Planning is a way to extend the control over your affairs “beyond the grave.”

2. Death is an Unpleasant and Uncertain Event. People often put off any planning or do not want to think about their passing. It is easy to procrastinate and it always seems like planning can be left for another today. However, death is an unfortunate reality for us all. As Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.”

What happens without a Will?

If you don’t have an Estate Plan or Will, in Memphis and Nashville Tennessee, your Estate, like Prince’s, may become subject to state law and Probate Court orders. This is likely to lead to familial dissension and excessive fees and costs for the Estate, which in the end reduces the amount of assets remaining for your Beneficiaries. Your money may also wind up going to the Government! For example, in Prince’s case, the Probate Court has appointed a Corporate Executor for his Estate, and many attorneys will be involved because of the number of potential Beneficiaries. There will be many questions as to how the royalties and future earnings from Prince’s music will be handled. Estate taxes will have to be paid. All of these factors will lead to a lot of money being spent (and some might even say “wasted”). All of the headaches and money spent, as well as the publicity involved, could have been avoided, or at least minimized, if Prince had planned ahead by having a Will or Estate Plan.

Moral of the Story:  Don’t be like Prince.

Don’t be like Prince. Plan ahead now! Having an Estate Plan is easy, and every person can and should have one in place. A basic plan can be relatively inexpensive, even if drafted by a licensed Tennessee estate planning attorney, like the ones at Patterson Bray.  We have offices in Memphis and Nashville. In Tennessee, and some other states, it is also possible, although often not recommended, for a handwritten Will to be valid. To read our blog post about handwritten wills, CLICK HERE.

Need a Tennessee Estate Planning Lawyer?

Call Patterson Bray if you’re in the Memphis or Nashville area at 901-372-5003 or email us here.