Summertime Estate Planning – Vital For Business Owners

Posted by on Jul 26, 2018 in Legal News |

Summer means extra time to check up on things you may have pushed to the side during the year. For business owners, this summer period is especially important, as it gives the time to review your asset protection or update partnership agreements. 

Estate planning is particularly vital for business owners, as their business is part of the legacy that they’ll continue to leave behind after their passing. Here are some ways that business owners can update their estate plans this summer. 

Review Asset Protection

An example of such protection is a succession plan. This is important for any business form, whether a partnership, sole proprietorship, or family-owned business. If you don’t formulate a plan for when you pass on, your business will be without direction, and that can seriously harm your company, if not sink it entirely. 

For sole proprietors whose business and personal assets are not separated, you especially need a solid plan of action. An example would be using your personal assets to cover business debts and settle them after you die. You can also pick your successor or, if you plan to sell when you die, find ways to make the sale easy and painless for your heirs. 

Family-run businesses might do things differently, choosing to pick heirs based on their level of contribution to the company. You might want those who are most involved to take over the business and buy out the less-involved stockholders. Losing a family member is difficult enough; you want to make sure that the direction you’re giving your family makes this experience less painful.

Update Partnership Agreements

Updating partnership agreements is another area in which business owners (partnerships) can benefit from thorough estate planning. An example of a common tool that partnership agreements use in the event of a death of one of the partners is a buy-sell agreement. 

In a buy-sell agreement, the partners establish a plan for the business in the event of the death/incapacitation of one of the owners. In this document, you can tell your partners whether or not you want them to buy out the share you own, block certain people from becoming involved in the business, or sell your share. This requires a lot of communication, but it is worth it to ensure the health of your business. 

Tax Minimization 

The “death tax” is just as ominous as it sounds. It is a tax on the value of your business that is due in less than a year of your passing. To prevent your death from turning your business into a must-sell, there are two different types of tax breaks, found in sections 303 and 6166 of the IRS code, which have to do with stock value and deferral. You can use estate planning to take advantage of these sections and save your business’s value after you die.

Business owners, whether they’re proprietors of small, mid-size, or large businesses, all need to stay up on their estate plans, as this diligence will ensure the future growth of their businesses even after they have passed on. Use the extra hours this summer to review your plan and make updates if needed.  

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International Travel: Time For An Update!

Posted by on Jul 16, 2018 in Legal News |

There’s nothing more thrilling than a great international vacation! As you make your checklist of things to do before you travel, don’t forget to put “Update estate plan” on the to-do list. 

When you’re about to travel internationally, you want to make sure that you update not just your passport, but your estate plan as well. Every three to five years, you should review your documents. There might be papers in your estate plan that you drafted a decade ago; it would definitely be a good idea to look over those, as it’s very likely something in your life has changed in the past ten years. 

Why should I update my estate plan? 

International travel in particular Is a significant catalyst for updating your estate plan because it has a lot of unknown variables. You’re overseas, and if something happens, the situation will not be handled in the same way it is here; your doctors aren’t overseas, and your entire family and lawyer probably aren’t traveling with you. Updating your estate plan is important in case something happens. If you become sick, incapacitated, or even pass away while on the other side of the world, documents in your estate plan will become tools to guide others on how to manage the situation and get your affairs in order.

Documents to Review 

Not only should you review these documents, you should also update them if necessary. This is by no means an exhaustive list, and you might find that there are more things you need in your plan to ensure your total preparedness for travel. 

That said, here are the major ones to be on the lookout for: 

  • Power of attorney. A power of attorney is a trusted individual that you select to make healthcare and/or financial decisions for you in the event that you become too sick or incapacitated to do so. While you may have chosen your power of attorney with domestic ailments in mind, you should also add a stipulation for that person (or perhaps someone else) to be in charge of your healthcare and finances should you be incapacitated while overseas.
  • Living will. Your living will is a healthcare directive that tells doctors and hospitals what to do with you when you are receiving treatment yet are unable to communicate your health wishes. This state usually happens when you’re too sick to tell the doctors what you want. Update your living will to include a provision that makes similar arrangements for when you’re hospitalized overseas, as well as arrangements to transfer you to your preferred hospital if possible.
  • Guardianship. Worst case scenario, you pass away while overseas. If you have young children, you don’t want there to be a delay in finding the proper guardian for them. Choose your minor children’s guardians beforehand. That way, if something happens, they’ll be in the best hands possible.

Have fun on your trip! You’ll have greater peace of mind while traveling just knowing that, in the event something happens, you’ll be in good hands. Reviewing and updating your estate plan is not a cumbersome process at all, and it will be time well spent. 

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July Is Unlucky Month For Weddings. Compensate For Bad Luck With A Good Prenup!

Posted by on Jul 10, 2018 in Legal News |

Did you know? July is the Unlucky Month for Weddings. If you’re beyond superstition and decide to defeat the odds, make sure at least that you have a prenuptial agreement in place and all of your affairs in order. After all, lucky or unlucky, we do not need to bring up the stats on divorce rate, do we?? Take our advice and consider setting up a prenup, cause it’s better to live in “richer” than in “poorer” once the wedding bells stop ringing. 

A prenuptial agreement isn’t pessimism, so much as it is smart business planning. Prenuptial agreements are contracts entered into prior to the marriage that discuss what will happen to each party’s finances in the event the marriage fails. Broaching the subject of a prenup can be tricky, as your future spouse might think you’re betting on the relationship to fail, but it is an important conversation to have in order to protect yourself and your assets. It’s about smart business planning and minimizing risk.

What is a Prenup?

Prenuptial (prenup) agreements are often called “premarital agreements.” This type of private ordering functions as a contract. The contract is entered into by people prior to their marriage or civil union. Prenups can cover a lot of different areas, but the idea is pretty much consistent: protecting your assets in the event of a divorce. Categories of prenups have to do with property division, spousal support, and asset forfeiture. There are also guardianship conditions that can be included, though child support and custody is not modifiable via a prenup. Only a court can determine and modify child support and custody. The reason for this is that what you put in the prenup might not be in the best interests of the child. The best interests of the child takes precedence over whatever private order you might seek. 

Five things are required for a prenup to be valid. First, the prenup has to be in writing, Second, the prenup must be voluntarily executed by the parties. Third, at the time of formation, all information has to be fully and fairly disclosed. Fourth, the prenup can’t be unconscionable (which means so unfair that it “shocks the conscience” of the average observer). Lastly, it needs to be notarized the same way that a deed would be. If you meet all of these conditions, you have got yourself a prenup.

How do I get a Prenup?

Prenups are a common asset protection tool of estate planning. Consult an estate planner to see what he or she has to say about organizing the prenup. The planner will ensure that the above elements are met and your prenup is valid. But, remember, a prenup has to be voluntary, so your future spouse must be on board with the idea. Otherwise, the prenup won’t be valid. 

Benefits of a Prenup 

Your personal and business assets will be protected in the event that your marriage is unsuccessful. You can guard them against forfeiture and division, and you won’t lose what you’ve worked hard for because of your divorce. Should the marriage go south, your business will survive and you won’t get hit hard financially. 

Hopefully, this article has encouraged you to have the conversation about prenups. These agreements aren’t a reflection of the strength of your relationship; they’re a reflection of how careful you are about finances, and fiscal responsibility is always a good characteristic to have in a partner. Consult an estate planner to create or update your prenuptial agreement today. 

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Come On Baby Light My Fire(works)! I’m Getting An Estate Plan

Posted by on Jul 3, 2018 in Legal News |

It’s almost the Fourth of July! Fireworks, steamy barbecues, pool parties and tons of fun are on the table! But, before you start lighting things on fire — especially in the evening, after having treated yourself the entire day to way too many mimosas, margaritas, or beers … — make sure your assets are protected. And we don’t just mean limbs, noses and other precious bodily parts. We mean estate planning. Summer in general is a good time to take care of stuff you might have been too busy to look at during the rest of the year, and reviewing and updating your documents to ensure your assets are protected is never a bad idea. 

Here are some major estate planning tools that you can use to keep your assets safe:

Living Trust 

A living trust is a three-party fiduciary relationship. You are the donor. The person you’re ultimately giving your assets to is the beneficiary, and the third party is known as a trustee. You give nominal title of the assets to your trustee, who then confers the property to the beneficiary at a set time. The living trust is effective immediately and it can be revocable or irrevocable, depending on what you want. 

The reason a living trust is such a powerful way to protect your assets is because it allows you to avoid probate court. Your assets will go directly to the desired recipient. They won’t be taken through court and possibly diverted to pay off debts. 

Power of Attorney 

The power of attorney is a person you choose. This trusted individual will take care of your finances in the event that you become too sick or incapacitated to take care of them yourself. The POA handles important decisions for you regarding your assets, and he or she handles them during a very vulnerable time in your life. For that reason, you should give a lot of thought to the person you choose, as they will be protecting your assets when you aren’t able to do so yourself.

Living Will

The living will is similar to a POA in that it takes place when you’re too sick or incapacitated to make your own decisions. The living will is a directive that tells hospitals and doctors what you want done in terms of medical decisions. When you can’t take charge of your own healthcare in the moment, there will still be a way for you to have a say in what happens to you.

Business Plan 

Estate planning is particularly important for business owners. Business owners should have a succession plan in their estate planning toolkit or a directive on the sale of the business after they pass away. Updating partnership agreements and reviewing documents pertaining to the life of the business after you, the owner, dies is vital to ensuring the growth of the business and financial wellbeing of your family. 


If something happens to you and you have minor children, who will be their guardian? Guardianship is an important tool to have in your estate plan because it gives you peace of mind that your children will be taken care of even if you’re not around. Having guardianship documents is always a good idea for anyone with minor children.

These are just some of the many ways you can protect your assets. So, before you start lighting fireworks and firing up the grill, make sure that you have taken care of your estate planning needs. After that, Happy Fourth!

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