All in the Family: Succession Issues in Family-Owned Businesses Lowenstein Sandler LLP

All in the Family: Succession Issues in Family-Owned Businesses Lowenstein Sandler LLP

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So going back to the nine-acre parcel, if it could be done equitably to give each person an acre, it fortifies that preference again. And where courts could absent the act, go off and force a sale anyway, it has some provisions to reduce the likelihood that that would happen. The Super Lawyers patented selection process is peer influenced and research driven, selecting the top 5% of attorneys to the Super Lawyers lists each year.

Not just the money but the emotional and spiritual legacy, telling them the things that gave your life meaning. So maybe you’ll end up thinking about estate planning in some different ways than you do right at the moment. And I’m reminded of the old adage as we start our discussion on this topic that when all else fails, read the instructions. Because the first thing you need to do is to look at the terms of the trust agreement. And while much is going to depend on state law as to whether a beneficiary’s interest can be considered in a divorce proceeding, the starting point is always going to be to determine the nature of the trust interest. And I’ll go straight to the bottom line and then I’ll backtrack and take you through the analysis.

And one way to think about how tenants in common own their property is if you think about how shareholders own shares in a corporation. And there’s a law across states has made tenancy in common to default ownership structure for two or more family members who inherit real property. And the law presumes that where two or more people acquire undivided interest in real property, either by conveyance during life or by a devise upon someone’s death, they take ownership as tenants in common by default, unless there’s specific language in the conveyance that communicates the intention to create a joint tenancy as opposed to the tenancy in common. There’s actually an eighth question, but that usually comes up in the context of trust created by parties to the marriage.

Practice Leadership

Our trusts and estates velocity trade clients can tap the full resources of Lowenstein Sandler for help with a broad array of legal and business matters. Our lawyers tailor estate plans to each client’s circumstances, goals, and dynamics, addressing complex, evolving federal and state laws with the goal of minimizing taxes. We represent family businesses and other privately owned firms, helping them create tax-smart strategies that achieve the owners’ goals, from preserving the business for future generations to selling the company. We work with executors and trustees in estate administration and handle the fiduciary litigation that sometimes arises from disputes around them. So tenancy in common is often referred to as undivided ownership.

Estate, Gift, and Income Tax Planning in the Time of COVID-19

• Warren K. Racusin practices elder law in Roseland, NJ, at Lowenstein Sandler.
• They address the importance of—before initiating divorce proceedings—reviewing all of one’s estate planning documents, including beneficiary designations, executors, trusts, and prenuptial agreements, to make sure that they reflect your current wishes, and they illustrate the dangers of failing to prepare for a split with examples of disastrous celebrity breakups.
• There’s actually an eighth question, but that usually comes up in the context of trust created by parties to the marriage.
• Our practice also extends beyond trusts and estates to marital planning, charitable planning, and litigation, all with a focus on each client’s unique situation.

Warren K. Racusin practices elder law in Roseland, NJ, at Lowenstein Sandler. Warren is a member of the New Jersey bar with 46 years of legal experience. But perhaps the most important thing we provide is the good judgment and sound advice that comes from decades of helping individuals and families articulate their wishes and achieve their goals. Indeed, we believe we can genuinely meet our clients’ needs only when we genuinely understand our clients. From the law firm Lowenstein Sandler, this is Splitting Heirs.

• And in a partition by sale, the court will order the entire parcel of land to be sold.
• We assist tax-exempt organizations, including family foundations, in understanding and complying with complex tax rules and other regulations while helping donors achieve their philanthropic goals.
• Estate planning really involves thinking about the people and things that are most important to you—family, loved ones, charitable causes and everything else that gives your life meaning.
• And the bottom line is that the less chance a trust beneficiary will receive a trust distribution and the less control a trust beneficiary has over trust assets, the less likely that their trust interest is going to be reachable in divorce.
• Our lawyers tailor estate plans to each client’s circumstances, goals, and dynamics, addressing complex, evolving federal and state laws with the goal of minimizing taxes.

An information packed and hopefully entertaining guide to estate planning and the world of trusts and estates. Estate planning really involves thinking about the people and things that are most important to you—family, loved ones, charitable causes and everything else that gives your life meaning. Religious leaders, wealth advisors, divorce attorneys, and others will team up with experienced trusts and estates lawyers from Lowenstein Sandler to offer you creative, outside-the-box approaches to achieving your estate planning goals. But if you think about families who are land rich, cash poor, meaning that this piece of real estate, this inherited real estate is the largest asset that they have between generations, and you have a complex mix of ownership shares, when I’ve done these title searches, the numbers are all over the place, it’s very impracticable to physically divide the property. And so most often we see heirs’ property partition actions result in a sell, which then means that those families that are reliant upon that asset as generational housing and generational wealth lose that because when it is sold at auction, it’s sold for pennies on the dollar.

They’re the questions that you asked when you review the trust document. But as we sort of alluded to Warren earlier in our discussion, once you’ve reviewed the trust document, that’s only half the picture, because you have to look at what has actually happened and what does that mean? It means you have to review the history of trust distributions and a court can consider the history of trust distributions to identify any patterns and consider whether the couples have used the trust funds to support their lifestyle, which I think in our scenario that’s what you posited. The second is that the act fortifies a preference for a partition in kind. Where we discussed the difference between a partition in kind and how certain cmc markets review courts had been more amenable to granting a partition in sale, even where it was not necessary, the Uniform Act creates a preference for partition in kind where it can be done equitably.

She’s currently a Loeb Fellow at the Harvard Graduate School of Design. And during this fellowship, Mavis has also sought to raise the visibility of numerous ways in which heirs’ property is important to affordable housing, urban planning, climate resiliency in markets. So we just need to review the overall estate planning and the first document that comes to mind that needs review is a will or a revocable trust. Some people use revocable trust in conjunction with a will as their primary estate planning vehicle.

To safeguard the assets of individuals and their families, Warren Racusin draws on his extensive technical knowledge and familiarity with constantly changing tax laws. Beyond the «dollars and cents part,» he offers a compassionate approach that takes into account the hopes, dreams, and intense emotions his clients experience while working through these highly sensitive matters. Warren’s compassion has earned him the confidence of a wide range of clients, a number of whom have named him an executor or trustee and many of whom are children or grandchildren of people he has counseled for decades. He also advises on the complex estate and tax planning issues that can attend his clients’ marriages, regularly crafts prenuptial agreements, and assists matrimonial lawyers with the tax and estate planning aspects of divorce.

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Fortunately, we have a fabulous unpacker here with us … I’m not sure there’s a female form of the word unpacker, or there’s even such a word as the word unpacker, Sharon Klein. Sharon is the president of Family Wealth, Eastern US Region, for Wilmington Trust. Among her many accolades, she is a fellow of the American College of Trust in the state council, as I am, a fellow fellow. Krames Business named Sharon to its 2020 inaugural list of the most notable women in financial advice.

Peer Reviews

So you need to review the will or the revocable trust for how property passes and also who is nominated in those documents to act as executor and trustee. In other words, are those dispositive provisions and nominations of fiduciaries, are they up to date in light of the pending divorce? It’s important not to wait until divorce is final and to focus on it while divorce is pending because it’s likely the case in our scenario, Warren, that neither Hubby nor Lovey want their soon to be ex to inherit one more dollar than they have to give them. EEach of these situations, and many others like them, demand a rare combination of experience and empathy. That we have it shows in the relationships we’ve built with clients and the accolades we’ve received from industry watchers and our peers alike. Chambers USA ranks Lowenstein Sandler in the top band for private wealth law in the District of Columbia (2024) and New Jersey (2024), and we are regularly ranked among the nation’s Best Law Firms by Best Lawyers®.

Trusts & Estates

So we’ll hold that one until we get to discuss the trust that Hubby created. We talked about differences between third party trusts and trust created by a spouse, and courts are less likely to consider a trust created by a third party as part of the marital estate. So a trust as in this case that’s created by a parent or a grandparent, for example, because that’s more likely to have been done as legitimate estate planning as opposed to a spouse creating a trust which may be seen as trying to shelter assets in anticipation of divorce. It just looks more suspicious if a spouse transfers assets to a trust and then says, sorry, they’re no longer part of the marital estate. And then I will say, looking at partitioning kind, there was a case in Montana, and I would describe Montana as a great state for family real estate ownership and very supportive of generational family businesses.

In addition, as same-sex marriage laws have taken effect around the country, Warren has become increasingly well-versed in the special—and frequently novel—legal issues emerging in the marriage agreements of LGBTQ couples. Sometimes disputes arise among family members that cannot be resolved amicably. In these cases, Warren works closely with his colleagues to advise on these matters, bringing empathy and discretion to these challenging situations.

Montana recently saw where a court-ordered physical partition resulted in about a hundred acres being split up into about 13 parcels. And the local government was frightened because that was infrastructure that they didn’t have to be able to support those new resulting parcels. So the spirit of partition actions is really to allow co-owners to extract their ownership interest, but it’s been leveraged in a very different way in present times.

Molefi, let’s turn to you and talk about the technical, legal side of this. Again, heirs’ property in effect involves the fractionalization of real estate down through multiple generations. Talk to us about the implications of that from a strictly legal point of view, the notions of joint tenancy or tenancy in common and its impact, the legal impact on what happens through heirs’ property as a legal and as a practical matter. From the law firm, Lowenstein Sandler, this is Splitting Heirs. With us today are my colleague Molefi McIntosh, who teaches a course about heir’s property at Howard University Law School, and our special guest, Mavis okcoin review Gragg. Mavis is a self-described death and dirt lawyer, empowering families to use real estate as a source for intergenerational resiliency and wealth.