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Knoxville Family Law Blog

Small businesses and estate plans

Small business owners in Tennessee should make sure that they have estate plans in place that specify how their companies are to be handled when they die. In situations where small business owners die without a will or an estate plan, what happens to the business that is left behind will be determined by the laws in which the decedent lived.

Preplanning is a necessary part of creating an estate plan, and entrepreneurs should be prepared to create more than just a will. Their estate plans should specify what actions should be taken with their families and assets in the event of incapacitation or death.

Planning for a new school year following a divorce

A new school year in Tennessee comes with a wide range of emotions for any child. There's the excitement of being around familiar friends and getting back to favorite sports and the anxiety over tackling more challenging classes. The apprehension of returning to school can be even greater for children following a divorce, especially if they'll now be splitting their time between two households. One way parents may be able to make the transition easier is to have a solid game plan in place before the school year begins.

This might include having a group discussion in which a child talks about their main goals for the upcoming school year and parents share their input. If a group discussion isn't possible because of lingering tensions following a divorce, children may be able to discuss their academic and athletic goals separately with each parent. With school-related expenses for things like dances, trips, or sports equipment, some parents prefer to do a 50/50 split, while others opt to divvy up these financial responsibilities by income level.

Collaborative divorce: a more amicable solution

If you and your spouse are contemplating a Tennessee divorce, it is highly likely that neither of you looks forward to a long, expensive court battle wherein the adversarial lines are firmly drawn between you. But divorce does not have to be this way. If both of you would just as soon not verbally rip each other to shreds in open court, you may wish to consider obtaining a collaborative divorce.

Unlike a traditional litigated divorce, a collaborative divorce has no adversarial relationships. While you and your spouse each retains your own attorney, the similarities stop here. Your respective attorneys never see each other as adversaries, nor do they see you and your spouse as adversaries. Instead, the jobs of you and your spouse are to negotiate and settle your differences in a civilized manner. The jobs of your respective attorneys are to guide you through the divorce process and protect your respective legal rights should such protection become necessary.

Importance of estate plans

One of the most significant mistakes Tennessee residents can make regarding an estate plan is not having one. Individuals who die without an estate plan create a situation in which their loved ones will not receive their inheritances as they intended. Family conflicts can arise, disbursements can be delayed for a long time, and the estate may be subject to additional taxes that otherwise could have been avoided.

Many people in the United States have not completed a will or living trust. According to a 2017 survey, just 40 percent of adult Americans have those legal devices in place. The survey respondents reported that the main reason for not taking estate-planning steps is that they just haven't "gotten around to it."

Including immediate child care needs in an estate plan

Many Tennessee residents are well aware of the financial and practical benefits of estate planning. By preparing key documents, estate owners can help their beneficiaries to avoid unnecessary taxes, probate costs and associated delays. In addition, people who plan for the future often feel a profound sense of peace of mind knowing that their loved ones will be provided for.

For parents in particular, developing an estate plan is an important way of ensuring that their kids will be supported in the future. Parents can develop a structured way to provide wealth to their children by creating trusts, and they can name their proposed guardians for their children in their wills. When both parents pass away suddenly or unexpectedly, however, there may be a need for immediate support for the child before guardianship is confirmed by the court.

How to choose the right people for roles in an estate plan

A major problem that many Tennessee residents make when planning for the future is failing to appoint the right people for various roles in their estate plans. These roles could include trustees, executors, powers of attorney and smaller roles including those appointed to manage Social Security payments.

One issue that arises is that these appointments may be haphazard, made over time and include many overlapping responsibilities. Another problem is that some role players might be unaware that they have been appointed until it is time for them to act. These people may not want the responsibility or may live so far away that they cannot execute the duties adequately. A third issue is that they might be the wrong choice for the position. Different roles require different skills and areas of expertise. There could also be conflicts of interest between beneficiaries and the people appointed to these roles.

Women often face unique money issues after divorce

Women in Tennessee who are going through the divorce process may be unpleasantly surprised by some of the financial revelations that take place. In one recent survey, 46 percent of divorced women reported that their separations resulted in financial surprises.

In an effort to gain a better understanding of how divorce can impact finances, the survey queried 1,785 women about their roles in handling financial issues while they were married. All of the participants were either considering divorce, in the process of separating or already divorced. Some of the women responded that financial matters were managed solely by their husbands, including the earning of income and the management of the couple's investments and bills.

3 ways to help your children through divorce

Divorce is a stressful and emotionally trying time for any family, but the impact on children is especially great. Children may take on emotions of guilt or fear as they face the reality of you and your spouse's divorce, and the psychological impact can affect them in significant ways.

As a parent, you want to ensure that your children come through the divorce in an emotionally healthy way. Here are three ways you can help your kids as you move through separation and divorce.

Trusts and rising interest rates

By using trusts as part of an estate plan, a Tennessee resident can ensure that certain assets are managed and distributed according to their wishes. Those who have been uncertain about using trusts may be interested to know that due to the recent rise in interest rates, certain types of trusts, such as GRATs and CLATs, can be very beneficial to grantors.

A grantor retained annuity trust, or GRAT, fuses together a trust that is to be used for a certain length of time and an annuity from which the grantor receives a set annual amount. The annuity payout that the grantor receives is their retained interest while the remaining value of the annuity gets passed down to the named beneficiaries.

Dealing with restrictions while a divorce is pending

When Tennessee couples decide to divorce, they may prepare an array of financial, social and practical changes and consequences. Indeed, there will be many changes that take place after the divorce is finalized and asset division is completed. However, there are also a number of restrictions that both spouses will have to deal with while the divorce is pending.

After the divorce papers have been filed but before the dissolution of the marriage is final, there is a general presumption that the status quo must be preserved in advance of assets being divided. For example, one spouse might have to keep their future ex on their health insurance plan until the divorce is final. Also, some parents may have a hard time traveling with their children, especially if the travel is overseas or even out of state. In many states, restrictions are immediately imposed once one party files for divorce. Some of the restrictions are more obvious, like prohibitions on selling property or withdrawing large amounts of money from the bank. These restrictions can even apply to sole property like premarital inheritances, so it is important to be careful.

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