Continuing to deliberate about when and how to exit from his family business, Big Daddy Ernest Bux, 65, considers yet another task on his checklist: Determine Exit Strategy. He’s already Identified Successors and Decision Makers, and Planned for Contingencies. Yet to be tackled are Establish Goals, Plan Entity Structure and Transfer, Complete Estate Planning, and Implement Document Maintenance and Control. Asking his banker last week about a new loan to expand his business, Big Daddy learned that his banker cannot give him a business loan without seeing a complete exit plan. How is an exit strategy different from last month’s thoughts on identifying successors? Continue Reading Family Matters: Can a Family Business Succeed Without a Written Exit Plan?
Realizing last month that, at age 65 he’s ready to think about his family business succession plan – especially for Buxboro State Bank, Big Daddy Ernest Bux identified his checklist: Plan for Contingencies, Establish Goals, Plan Entity Structure and Transfer, Complete Estate Planning, Identify Decision Makers, Identify Successors, Determine Exit Strategy, and Implement Document Maintenance and Control. Must Big Daddy’s family business have a contingency plan for divorce to succeed? Continue Reading Family Matters: Can a Family Business Succeed Without a Contingency Plan for Divorce?
Finishing a best-year-ever 2018 and being questioned daily by his second wife Anna Nicole about making her children officers and owners of the family business Buxboro State Bank, Big Daddy Ernest Bux concludes, at 65 years old, that it’s time to think about a family business succession plan. What should Big Daddy do? Is he likely to succeed? Continue Reading How can a Family Business Succession Plan be Successful?
After several months of telling family and friends that his wedding venue business on Big Bux Ranch was for sale, Jeff Bux is contacted by his biggest competitor Hustler Plentee who also owns a wedding venue in the next town south of Buxboro. Hustler asks if Jeff will tote-the-note because his credit is maxed out at Buxboro State Bank, which is owned by Ernest “Big Daddy” Bux. Wanting to avoid a broker’s fee and an attorney’s time, and hoping that he might be able to get a job at the Bank, Jeff – uncharacteristically – asks his father for advice to help him sell it himself. Can Jeff sell his own business? If you were Big Daddy what would you say? Continue Reading Should an Owner Finance the Buyer of Their Business?
Just before her 80th birthday, Ernest (“Big Daddy”) Bux’s octogenarian Auntie Delusional (Auntie Del) died without a will or any other estate plan in place to give guidance to her husband (Uncle Tom) and their two adult children. “Who needs one?” was her retort for decades. And, “Wills are so over-rated.” Was Auntie Del right? Is a will or other estate planning really necessary?
As summer ends and the cooler weather of fall arrives, Tripp Freeley yearned for the days of sun, sand and surf. So Tripp began planning his family’s vacation for next summer. A hotel would not work for Tripp, his wife and three young kids – they needed a house with multiple bedrooms. So Tripp went to an online short-term rental by owner website and reserved a house near the beach.
The next summer the family drove 7 hours from Dallas to the house. Shortly after they began getting situated there was a knock on the door. Tripp opened the door to find a local code compliance officer. The compliance officer told Tripp that the city made it illegal to rent the house, and they had 24 hours to vacate. Tripp is floored and mortified that his “perfect” family vacation is now ruined. Does the city have the right to ban property owners from renting their homes out on a short-term basis? Continue Reading Think You Can Rent Out Your House While You’re On Vacation? Think Again.
Having just fired up her Amazing Alexis and connected it with her other “smart” devices handling her heat, lights and security, Honor was sharing with her husband some troubling, sensitive health information about her trip that day to the doctor’s office. Honor’s tale was interrupted by a call from her brother who demanded “unplug your Alexis devices right now, You’re being hacked!” Sadly, Honor’s recorded tale also made its way to the editor of the neighborhood news-blog Gladys Gravits, who shared it in the community email, along with her effusive professions of sympathy. Does Honor have any recourse? Continue Reading Privacy Alert – Alexa (and Friends) is Listening!
A number of years ago John Drane, owner of Drane Plumbing & Supply, executed a Power of Attorney (POA) naming his eldest daughter LaTrina Drane as his attorney in fact. John’s debilitating stroke last weekend risks placing him in rehabilitation for months. Determined to continue the family business that offers its customers “Let Us Drain Your Swamp,” LaTrina dusts off John’s POA. Will Latrina have any problems? Continue Reading Returning “Power” to the Power of Attorney
A huge fan of the Hill Country, Skare D. Katz buys a large piece of undeveloped land from the Solable Family outside of Austin. Skare D. plans to build a ranch for retirement. One Saturday while Skare D. is visiting the property to visualize his plans, a woman shows up and stands underneath a large oak tree, staring at the ground. Skare D. approaches the woman and asks her for her name. The woman responds, “Inka Solable.” When Scare D. asks Inka what she’s doing there, Inka responds, “This is where my great-grandfather is buried. I come pay my respects every Saturday.” Dumbfounded, Skare D. responds, “Ma’am, I appreciate that, but I own this property now. I don’t want you coming by every Saturday.” Inka replies, “I have a right under the law to access this property when I want. I’ll see you in Court!” Is Inka right? Continue Reading The Grave Reality of a Cemetery on Your Property
On Valentine’s Day, Zack takes Kelly, his high school sweetheart who goes to a different college, to the Max for a romantic dinner. At the end of the meal Zack says, “Kelly, I want us to promise each other that after college we’ll both move back to Bayside and get married. Will you marry me?” Kelly responds, “Oh Zack, that’s wonderful! I love you so much and I promise.” Delighted, Zack puts the engagement ring on Kelly’s finger and says, “That’s great Kelly! Now there’s one more thing – I spent every dime I made working last summer on this ring. Will you promise me that if we don’t get married after college you’ll return this ring?” Kelly writes on her napkin “I promise to return my engagement ring if we don’t get married after college,” signs her name and gives it to Zack.
Two years later, Kelly decides to take make a surprise visit to Zack’s school one weekend. When she arrives she finds Zack at a party kissing another woman. “You two-timing slime ball! We’re through and never getting married,” Kelly tells him. Zack asks for the ring back and Kelly refuses. Three months later Zack sues Kelly for the ring. He still has Kelly’s napkin from Valentine’s Day. Does he have a good case even though he’s a pig?
Written Promises Around Engagements Are Enforceable
We covered this topic many years ago under a different fact scenario and the law has not changed since then. Zack is entitled to the ring. Kelly promised in writing to return the ring if they did not get married after college. Importantly, Kelly’s written promise was not conditioned on who broke off the engagement or why it was broken off. Thus, Zack gets the ring although his actions caused Kelly to call off the engagement.
What if Kelly Didn’t Give Zack the Napkin?
Kelly probably gets to keep the ring because it was Zack’s fault that the engagement ended, even though Kelly called it off. In the absence of an enforceable written agreement, Texas follows the conditional gift rule, which requires Kelly (the donee) to return the ring to Zack (the donor) if Kelly is at fault in terminating the engagement. But, Texas courts allow the donee to keep the ring if the donee can prove that there was a justified reason for calling off the engagement. Zack’s cheating should be enough, absent other facts.
Tilting the Scales in Your Favor
While some people might find the conditional gift rule offensive, other people may see it as a reasonable approach. Regardless, it’s important to remember that if you have significant assets you are bringing into a new marriage, you may want to consult with an attorney about whether you should have a prenuptial agreement in place in case the marriage does not work out.