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Top 5 Business Tips- Exit Strategies December 10, 2010

Posted by Arieh M. Flemenbaum in Business, business planning, Business succession - exit, Chicago Business, Top 5 Business Tips.
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With the economy still sputtering, your business needs to take advantage of the resources available to them. SCORE (http://www.score.org) offers useful, free resources, business counseling and business tools to small businesses.

One of SCORE’s great resources is its lists of “Top 5 Business Tips.” My pick for this week is SCORE’s 5 Tips on Exit Strategies – check it out at: http://www.score.org/5_tips_bp_7.html.

SCORE is a partner with the Small Business Administration (SBA) and is a national association dedicated to helping small business owners form and grow their businesses. SCORE offers terrific free resources, business counseling and business tools for small businesses.

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For information on how the business lawyers at Griffith & Jacobson, LLC can help your business grow, contact Arieh M. Flemenbaum at 312-236-8110 or by email at Contact Us (http://www.gjlaw.com/contact).

Griffith & Jacobson, LLC – We know business – Chicago’s Business Lawyers.

It is time for Strategic Business Planning for the New Year! November 1, 2010

Posted by Arieh M. Flemenbaum in Business, Business best practices, business check-up, business planning, Business succession - exit, Chicago Business, Legal Information.
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We recommend you perform a year-end strategic business review (and update your personal estate planning).  For our strategic business planning checklist part 1 & part 2:

http://www.jdsupra.com/post/documentViewer.aspx?fid=55397007-ca6e-4941-a509-88db4be93030

http://www.jdsupra.com/post/documentViewer.aspx?fid=d6ecf8e0-b07c-4a66-9e2a-3db1f2236c55

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For information on how the business lawyers at Griffith & Jacobson, LLC can help your business grow, contact Arieh M. Flemenbaum at 312-236-8110 or by email at Contact Us (http://www.gjlaw.com/contact).

Griffith & Jacobson, LLC – We know business – Chicago’s Business Lawyers.

 

Death tax or not – You still need an Estate Plan February 26, 2010

Posted by Arieh M. Flemenbaum in Chicago Business.
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With the repeal of the estate tax (and generation skipping tax or “GST”), you may have put your estate plan on hold.  This could be a serious mistake and put your family’s (and business’) financial future in jeopardy!

You need an estate plan whether or not the estate tax (and GST) applies to you.  Tax avoidance (or more accurately, minimizing the estate tax) is not the only reason to establish your estate plan.

Do Not Let the State Distribute Your Estate!

The primary focus of most estate plans is to determine how to distribute your assets. If you do not have an estate plan, the state imposes its plan on you,  and the state’s succession statutes will determine how your assets are  distributed.  Take John Smith’s case for example. John was married with 3 grown children. The oldest child worked with John in the family business. The youngest child was estranged from John and they had not talked in over 10 years. John repeatedly told his family he  wanted to  leave the business to the oldest child and he did not want anything passed on to the  youngest child. However, John died without a will and never put an estate plan into place. The oldest child was forced to file a lawsuit in probate to determine the ownership of the family business. The probate court applied the state statute and distributed  1/2 of John’s assets (including the family business) to his wife and split the other 1/2  among all 3 children equally! The court’s decision caused a huge rift in the family. With ownership of the family business in the hands of feuding family members, the business failed and closed its doors soon  after John’s death.

To avoid having the state decide who is entitled to your assets and how much they will receive you need to have an estate plan.

Rule From the Grave

Perhaps one of the most powerful tools an estate plan can provide is the peace of mind that your hopes and goals for your children will be relevant after you are gone. By transferring your assets through a trust, rather than outright, you can provide substantial limitations on the distributions from the trust.  Your lawyer can help craft provisions which link distributions from the trust to certain requirements or goals you wish to impose. For example, a trust could prohibit or limit distributions to a beneficiary until they reach a certain age or obtain a college degree.  On the other hand, the trust can also provide a beneficiary with the right to withdraw funds  from to help them with their education, pay for a wedding a house or open a business.

With an estate plan you can also provide substantial  protections to your surviving spouse, your children and the other beneficiaries of your trust.  In general,  debts and judgments against a trust beneficiary may not be satisfied from trust assets and a beneficiary cannot be forced to demand a distribution.  The use of a trust is also effective in keeping the assets separate from a beneficiary’s spouse; this reduces the likelihood of your assets ending up in the hands of a divorcing spouse.

Do Not Delay Have Your Say!

If you have children who are minors, you need to establish who will care for them if you pass away. This may especially important if your child’s other parent is remarried, absent, or otherwise ill-prepared to handle the responsibility of raising your children. Again, if you do not name guardians for your children, the state could appoint someone for them, particularly if your child receives an inheritance. A properly drafted estate plan will address who will be the guardian for your children. You can assign the responsibilities to one or more persons – i.e., one person can be responsible for the general welfare of your child, while another guardian can be solely responsible for their finances.

Plot Your Own Fate and Avoid Probate!

Probate – the administration and distribution of your estate through the probate courts-  can be an expensive, time-consuming process. However, with the proper planning it can be easily avoided. Estate planning is especially important to avoid probate when you own real estate in more than one state.

You probably have taken certain steps that can help you avoid probate, such as placing your home and bank accounts in joint ownership or providing for rights of survivorship, and completing beneficiary designations for your 401K/IRA and insurance policies. These steps help avoid probate, but only to a certain degree. These steps often do not allow for more complex distributions. In addition, these steps only provide for limited distribution/access on your death, but do not address or offer any instruction on how you wish to be treated and cared for if you become disabled, incapacitated,  or temporarily unable to make decisions for yourself. Worse yet, these steps may not offer your loved ones the access to your funds, accounts and other assets to pay for your care if you become incapacitated.

To avoid probate, you need to need to ensure your property, 401Ks, bank accounts are titled properly and your wishes are properly documented.

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