| fcg | 0 Comments | Estate Planning, Gun Trust, Probate

Fiduciary Liability

Family and litigation never mix well. That is why the selection of a good executor or trustee (collectively “Fiduciary”) is such an important piece of any estate plan. The Fiduciary can ensure that the estate or trust is administered smoothly and in accordance with the deceased wishes, or they can screw up the most beautiful, intricately drafted estate plans out there.

However, Fiduciaries do not have all of the power in estates and trusts. They have duties that they must perform or they may be liable to the beneficiaries of the estate or trust. By accepting the mantle of a executor you are accepting the liability that comes with it. You have a duty imposed by law to settle the estate as expeditiously as possible, without sacrificing the value of the estate.[i] Therefore, by accepting the position of executor you are accepting the responsibility to administer the estate as quickly as possible and you have a duty to reasonably preserve value of the estate.

In the event that the fiduciaries fail to carry out the express wishes of the Will or trust, or have breached their fiduciary duty in some other way, they may themselves be sued personally for damages. [ii] This can be as simple as failing to maintain proper accounting and documentation for the estate or failing to sell property for fair market value. If a fiduciary lets the accounting process get away from them, they may have to pay for the damage out of their own pocket.

Before you accept the mantle of a fiduciary, you need to understand your role. You have a duty to get the job done in an expeditious fashion, not just when it is convenient for you. From a practical standpoint, you also need to know the family dynamic that you are stepping into. Is it a large family with many beneficiaries? Is someone being disinherited? Is a beneficiary drug abusers or spend thrifts? Are you stepping into some sort of family feud? All of these could show you that there is the potential that you may be sued or challenged in your role as a fiduciary, whether or not you do your job perfectly.

Everyone needs a good Fiduciary, and if you can serve well in that role I do not want to scare you off. However, too often we accept the role of executor or trustee without fully understanding the implications of that decision. The executor position is one of service, though too many executors assume that simply because they are in the position of executor they have all of the power. If you abuse the power entrusted to you as executor you are opening yourself up for a suit.

[i] O.C.G.A. § 53-7-1(a).

[ii] O.C.G.A. § 53-7-54.

| fcg | 0 Comments | Business Planning, Estate Planning

Do you have a Plan?

According to Bloomberg, eight out of ten start-up businesses fail within the first eighteen months. While everyone has their pet explanation for this statistic, most of them can come down to one simple answer. Failing to plan.

For the small business owner failing to plan is completely understandable, at the outset you are doing everything you can to get your business up and running and pay the bills. However, the old adage is true: an ounce of prevention is worth a pound of cure.

Failing to plan for situations in both your business and your life can have disastrous effects on both your business and your family. Furthermore, most small business owners don’t see how a problem in their family can affect their business and vice versa. Wondering which corporate structure is proper for your business or getting your will in place seem important, but they can wait “until this business is calm” or “until I have something to give away.” Unfortunately, these statements mean that these issues are not important enough for me.

Because most of us would say that our families come first, I will address the personal planning first. Estate Planning is a comprehensive term that broadly addresses issues of asset distribution, healthcare directives, incapacity planning, and guardianship issues for the kids. While not everyone will need to address all of these issues everyone over the age of 18 should have at least some form of this completed.

Many of these topics will be covered in much more intensive blog post, but here are a few simple questions that need to be answered. I like to call these the car accident questions. Who will make your medical decisions for you in the event you are in a car accident and are unconscious? If you have children, who will be the Guardian for those children if you are in a car accident? If you are in a car accident and are unable to care for yourself for the rest of your life, who will be in charge of taking care of you?

All of these questions are more important than “who will get my stuff when I’m dead”, and they will all be addressed by a good estate plan. Also, none of them have an easy default answer under Georgia law. If left unanswered each would require petitions to the probate court and several hearings to be resolved.

While there are many more issues to address with a business in proper business planning, the same situations can illustrate the need for planning in your business. If you were in a car wreck and incapacitated, who would manage your business? If you were out of commission for two weeks or more, would you still have a business to come back to? Would you be able to make payroll?

Yes I know this seems to be an unpleasant conversation, and no I am not presenting you with any practical advice in this post. There will be many blog post that deal with specific planning issues in more detail. The only practical advice that I will offer you in this post is this: wouldn’t it be better to deal with these problems while you have a clear mind and can prepare for future problems.

If this post has given you concerns about the state of your personal or business planning, please give us a call. We will walk you through the process of making your plans, so that you understand the plans that you have in place.

| fcg | 0 Comments | Business Planning, Estate Planning, Gun Trust, SHOT Show

New Gun Trust Rules

As many of you have probably heard, the Bureau of Alcohol, Tobacco, and Firearms have issued a final rule on 41F, which will effect how gun trust are regulated and managed. Before the rule, Trustees were not required to provide fingerprints for the application for NFA items. Now anyone who is deemed a responsible party, as defined in the regulation.

A responsible party is defined as:

Responsible person. In the case of an unlicensed entity, including any trust, partnership, association, company (including any Limited Liability Company (LLC), or corporation, any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust. Examples of who may be considered a responsible person include settlors/grantors, trustees, partners, members, officers, directors, board members, or owners. An example of who may be excluded from this definition of responsible person is the beneficiary of a trust, if the beneficiary does not have the capability to exercise the powers or authorities enumerated in this section.

Unfortunately, as is the case with most legal definitions, this definition could be broadly construed or narrowly construed. We will simply have to wait for further guidance from ATF, which I am assured that they are working on putting out. As we continue to go through the updated rule and the guidance we will keep you informed of how your gun trust may be affected.

For now many of you may have trusts that may run afoul of this change. Don’t worry, it is not a retroactive ruling and they will not come and confiscate your firearms in the trust. This new rule will become effective 180 days after being published in the federal register, which would make it effective July 13, 2016. So if you have any current applications before the ATF you should be all right as well.

However, this may be a problem for those of you who wish to add to the trust. You trust that worked before, may no longer be able to pass the application process. To add to your trust you will need to amend your trust.