While most people assume only the uber wealthy need to worry about asset protection, those with less wealth and fewer assets may be at even greater risk. For example, if you’re a multi-millionaire, a $50,000 judgment against you might not be that big of a burden. But for a family with a modest income, home, and savings, it could be catastrophic.

Asset protection planning isn’t something you can put off until something happens. Like all planning, to be effective, you must have asset protection strategies in place well before you actually need them. Plus, your asset protection plan isn’t a one-and-done deal: It must be regularly updated to accommodate changes to your family structure and asset profile.

There are numerous planning strategies available for asset protection, but three of the most common include the following:

1. Insurance
Purchasing different forms of insurance—health, auto, watercraft, and homeowner’s—should always be the first line of defense to protect your assets. Whether you’re ultimately found at fault or not, if you’re ever sued, defending yourself in court can be extremely costly.

Insurance is designed not only to help you pay damages if a lawsuit against you is successful, but the insurance company is also responsible for hiring you a lawyer and paying his or her attorney’s fees to defend you in court, whether you lose or win. However, insurance policies come with various amounts of coverage, which can be exceeded by large judgments, so you should also seriously consider buying umbrella insurance.

Should your underlying insurance policy max out, an “umbrella” policy will help cover any remaining damages and legal expenses. We can help evaluate your current policies and ensure you have the right types and amounts of insurance for maximum asset protection.

2. Business entities
Owning a business can be an incredible wealth-generating asset for your family, but it can also be a serious liability. Indeed, without the proper protection, your personal assets are extremely vulnerable if your company ever runs into trouble. For example, if your business is currently a sole proprietorship or general partnership, you are personally liable for any debts or lawsuits incurred by your business.

Structuring your business as a limited liability company (LLC) or S corporation is typically the best way to go for many small businesses. When properly set up and maintained, both entities create an impenetrable barrier between your personal assets and your business activities. Creditors, clients, and other potentially litigious individuals can go after assets owned by your company, but not your personal assets.

If you own any kind of business, even just a side gig to earn extra income, you should seriously consider creating a protective entity to ensure any liabilities incurred by your company won’t affect your personal assets. We can help you select, put in place, and maintain the proper entity structure for your business operation.

3. Estate Planning
While each of the asset-protection scenarios shared above are “maybes,” there is one certainty in life—death. It’s going to happen to all of us. And your death, or an incapacity before it, is the biggest risk to your family’s assets. Planning in advance for what is certain to come is a gift to the people you love the most.

So, if you’ve been putting it off, now is the time to get it handled, and we’ve made it easy for you to do that.

You work way too hard to leave your assets at risk. Call us to schedule a Family Estate Planning Session, and let’s get this taken care of now. During your Session, you’ll become educated, informed, and empowered.

We don’t just draft documents; we ensure you make the very best legal decisions about life and death, for yourself and the people you love.

Dedicated to empowering your family, building your wealth and defining your legacy,

business succession planning 91024Preparing your company for your incapacity or death is vital to the survival of the enterprise. Otherwise, your business will be disrupted, harming your customers, employees, vendors, and ultimately, your family. For this reason, proactive financial planning — including your business and your estate plan — is key. Below are some tips on how to protect your company and keep the business on track and operating day-to-day in your absence.

Preparing for the Unexpected

If you are a small business owner, your focus is likely on keeping the company running on a daily basis. While this is important, looking beyond today to what will happen if you can’t run your business should be on the top of your to-do list. If you die or become incapacitated without a plan in place, you will leave your heirs a mess. Without clear instructions on how to run your company, the business you worked so hard to build will be in serious jeopardy. The right plan, along with adequate insurance, can help keep your business running no matter what happens.

Execute the Proper Business Documents

If your company has multiple owners, a buy-sell agreement is a must. This contract will outline the agreed upon plan for the business should an owner become incapacitated or die. Provisions in the buy-sell agreement should include:

  • how the sale price for the business and an owner’s interest are determined,
  • whether the remaining owners will have the option to buy the incapacitated or deceased member’s interest, and
  • whether certain individuals can be blocked from participating in the business.

Execute the Proper Estate Planning Documents

A properly executed will or trust will allow you to state how you would like your assets to be transferred — and who will receive these assets — at your death. A will or a trust also lets you identify who will take charge of the assets and manage their disbursement (including your business accounts) according to your wishes.

Although a will can be used to pass assets at death, creating and properly funding a trust allows any assets owned by the trust to bypass the probate process making the distribution of assets to heirs much faster, private, and may reduce the legal fees and estate taxes your heirs will owe.

Additionally, a trust can help your loved ones manage your trust assets if you become incapacitated. While you are alive and well, you typically act as the trustee of the trust, so you can manage your business and assets with little change from the way you do now. But unlike a will, a trust allows your successor trustee to step in manage things if you become incapacitated. This process avoids court involvement, allows for a smooth transition of trust management (which can be very important if your business is an asset of your trust), and proper continuing care for you in your time of need. Although having a will can be a great way to start, most business owners are much better off with a trust-based estate plan.

Purchase Additional Insurance

Whether you own the business by yourself or are a co-owner, it is important to have separate term life insurance and a disability policy that names your spouse and children as beneficiaries. The money from these policies will help avoid financial hardship while the buyout procedures of the buy-sell agreement are being carried out.

Contact Your Estate Planning Attorney

Having a plan for your business in the event you are unable to continue managing the company is essential to keep the company going. An experienced attorney can explain the many options you have to protect your enterprise allowing you to focus on what you do best — running your company. Give us a call today to get started protecting your business.

Dedicated to empowering your family, building your wealth and defining your legacy,
Marc Garlett 91024

facebook-for-business-91024If you’re on Facebook, you may remember that they initiated a “legacy contact” program a few years ago. Legacy contacts allow people with personal Facebook accounts to designate someone to manage their account after they pass away. But Facebook also offers business pages. So what happens to those pages if you pass away? It’s an important question because you probably don’t want your business page to expire with you.

Let’s start with the basics. How did you initially set up your account? In all likelihood, you simply connected your business page to your personal page. Facebook has a strong preference for connecting business pages to personal pages, even though the two appear as separate on Facebook. But if you don’t have a personal account, Facebook allows you to create a free standing business page.

Personal Facebook accounts holders can decide how they want their pages to be handled when they die from among three options: memorialized accounts, legacy contacts, and account deletion.

Memorialized accounts place the word “remembering” next to the person’s name on their profile page. This allows friends and family to continue to share memories, and the page remains visible to its audience. A memorialized account may be used alone or maybe combined with a legacy contact.

The legacy contact must be named by the account holder before death. The account holder sets the legacy contact’s authority, including things such as dealing with and making posts, reading messages, and responding to friend requests.

The third option is account deletion. Again, this option must be chosen by the account holder before death.

If, on the other hand, you have created a freestanding business page, you were initially prompted to choose additional account administrators. However, most people do not use this option for two big reasons. First, Facebook does not allow someone with a personal account to create a freestanding business account. And second, freestanding business accounts are much more limited in their available customization.

There are so many things to think about when it comes to passing away that it is easy to become overwhelmed. Even if you have already dealt with your personal estate planning, it’s critical – if you are an entrepreneur – to also make provisions for your business. Facebook has become a nearly indispensable tool for small business marketing. Continuing to serve your customers (or notifying them properly in the event of your death) could mean the difference between your company surviving or failing shortly thereafter, as many companies do.

If you have any questions or comments about ensuring your business lives on as part of your legacy after you are gone, please reach out and let me know.

Dedicated to your family’s health, wealth, and happiness,
Marc Garlett 91024