Business Succession and Tax Avoidance

Our client, the owner and president of a multimillion dollar company, had business succession and estate planning needs.  We created the structure he needed to slowly pass his business on to valued key employees.    We also established tax avoidance vehicles that would provide for him and his spouse during their lifetimes, leave a substantial inheritance for their children, and save more than one million dollars in estate taxes.  At the conclusion of the signing ceremony, he remarked that he was upset about the estate tax system: he had the foresight to use our services and so his children’s inheritance would not be taxed; however, another person in his situation who did not use competent estate planning counsel would have a tremendous tax burden.  He was right.  Until the estate tax system is changed, the services of qualified estate planning counsel are necessary.

 

The Right Documents for the Circumstances

Our client was a business owner who wanted to pass ownership of his commercial ventures to his business partner and the remainder of his estate to friends and relatives, all with the least tax burden possible.  The matter was complicated by a number of relatives who expected to receive more from the estate than our client was planning to give them.  We prepared airtight documents.  We also prepared advance medical directives and durable powers of attorney in the event our client became incapacitated and could not manage his own affairs.  All of our work became necessary when our client suffered a brain tumor that fully incapacitated him.  Our documents took care of him in the manner he intended while he was alive and withstood all challenges from disappointed beneficiaries when he died.  All of this was achieved with the lowest tax burden possible under law.

 

Recovery for Heirs by Will Contest Litigation

An elderly woman died with a will leaving her house “and its contents” to her brother with other siblings sharing the remainder of her estate. At the time she died, all of the woman’s accounts had been liquidated and she had cash – possibly as much as $200,000 – in her home. Following her death, the brother took possession of the house and kept the cash as “contents” of the house. We represented the other siblings in a suit to recover the cash. In a case of first impression in the District of Columbia, the court found after a trial that a bequest of a house “and its contents” does not convey money in the house at the time of death. The brother was required to pay the estate the value of the cash.

 

Finding the Right Legal Counsel

Our client’s mother had just passed away.  The estate was a large one, but he thought the administration of her estate would be straightforward.  He went to a lawyer who conducted a brief review of the estate and advised the client that the administration would take well over a year to complete and would involve substantial legal bills.  Confused by this advice, the client came to our attorneys.  Our review of the estate found that it was perfectly suited for Maryland’s modified administration procedure.  The administration of the estate was concluded in a matter of months at a small fraction of the cost estimated by the first lawyer.  The client was right to seek the help of legal counsel, but finding the right legal counsel was what made the administration a success.