Michael Earl Garner's Legal Cases (3)

Trusts

Estate Planning Case No. 1

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OUTCOME: Successful Administration

When a second parent dies, it is a traumatic event for the remaining family. Worse yet the person who normally keeps disagreements in check is often the one who is no longer there. I was the attorne ... y for a trust administration with several adult beneficiaries who came to physical blows trying to divide the personal property. I had not drafted the Trust document but it was legally adequate if not inspired in its drafting. Between the children, their spouses and their children, the potential for the situation to explode into litigation and permanent estrangement was high. The real key to managing the administration was not how to divide the bank account or whether to sell the house; it was how to handle the pictures and the china. I took all of the family pictures (several albums worth) and had them digitally scanned at high resolution. Every family was able to have the entire picture collection and could reproduce the physical pictures whenever they wished. Dividing the original albums became much simpler. With regards to the one complete set of china and flatware that had been used for family gatherings, I purchased sturdy travel containers and the family agreed that whoever was going to host the next family gathering would take them from most recent event - tying the responsibility of hosting with the reward of using the heirloom china. Once the tensions over the pictures and china had been relieved, the beneficiaries drew cards (2,3,4 etc.) to determine the order in which the rest of the disputed items would be selected. With the choices going from high to low and then from low to high until I ran out of items that were contested. While not everyone was overjoyed by the outcome, they were talking, planning the next family get-together and no one wound up in court.

Trusts

Estate Planning Case No. 2

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OUTCOME: Charitable Foundation Scholarship Program Established

2. A childless client wanted to give his considerable estate to charity. However, he had very specific scholarships he wanted to endow and the University would not guarantee they would use the funds th ... e way he wanted the scholarship to be structured. Frustrated he came to me to figure out a way to accomplish his goal. I explored his alternatives, re-interviewing the University's department in charge of scholarships and donations, looking at existing supporting organizations, local community funds and donor advised funds. I presented the client with my results and explained he had other options such as setting up a private foundation to manage the scholarships, independent of the university. After reviewing his options, he chose to create and fund the foundation which bore his name. With a relatively minor gift, I structured the foundation and applied for both its tax exempt status and for approval of the scholarship program my client wanted to establish. I received approval on both items. I set up the board of the foundation with the client, his friends and advisers, whom it was expected would continue the program if my client passed away. For the past several years the foundation has been making small scholarship awards each year and is ready to accept additional donations from the client during his life; for which he receives a charitable income tax deduction of the proceeds of his estate at death, from which there will be no estate tax taken.

Business

Business Case No. 1

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OUTCOME: Business Plan with Completed Sale

Preparing a business to be sold is rarely a simple or fast process. I have a client who came to me wanting to prepare her business for sale in the event she died. No one in her family wanted to take ov ... er the business and none of the employees could realistically purchase the business. I reviewed her books and records and the general business condition. The business was typical of a successful small business. My client could quote products, vendors, prices, customers and competitors off the top of her head. But nothing other than financial information and taxes were on paper or organized. The employees knew some pieces but if my client wasn't available, the business would be difficult to sell or even run, drastically reducing its value at her death. While my client was busy running her business, I was able to put together a plan to organize her records and create a central location for information. She identified several businesses that would be interested in buying the business and I calculated a value she thought was fair if the business was to be sold. At the same time, I made sure that her trust and other estate documents would work with the plan to quickly sell the business if she died. I discussed the plan with her trustee so that he would be able to act swiftly on her plan. It took almost two years to put everything together, but I was able to accomplish her goals. About three years later, my client decided that she wanted to retire and began to look for a buyer for her business. She told me that her business broker was impressed with the way her business was organized and how easy it was to understand. She sold the business for more than she originally valued it and retired.

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