As a business owner, it’s inevitable that you will face minor conflicts and disputes at some point. Whether it’s a client who refuses to pay a bill, an independent contractor who fails to fulfill the terms of their agreement, or a vendor who stiffs you on an order, dealing with such issues is a simple fact of doing business.

However, given the time and expense involved, filing a lawsuit in civil court to resolve such minor disputes typically isn’t worthwhile, especially if you are only trying to recover a few thousand dollars. And taking the matter to a collections agency usually isn’t a viable option either, since average fees run between 25% to 50% of the total amount recovered. 

If you can’t resolve the dispute privately, taking the case to small claims court may be your best option. Small claims courts are specifically designed to resolve relatively low-collar cases quickly and inexpensively, without the need to observe the complex formalities of traditional court proceedings, and without incurring costly legal fees.

If you are considering taking a case to small claims court, here are a few answers to some basic questions about the process.

What types of cases are resolved in small claims court? 

Small claims courts are real courts, and a judgment issued by a small claims court is just as binding and enforceable as one made in a traditional civil court. Small claims court can be a quick and inexpensive way for your business to collect on unpaid debts and resolve contractual disputes with clients, vendors, and other companies. However, you can only take your case to a small claims court if the money you’re seeking to collect is below a certain amount, which is known as the court’s jurisdictional limit. 

These limits are different for each state, with some as low as $2,000 and others as high as $25,000, so be sure to review our state’s jurisdictional limit before filing your claim. Additionally, be aware that no state allows for small claims court cases involving divorce, guardianship, name changes, bankruptcy, or to seek an injunction against another individual. These cases all require you to file a lawsuit in state civil court.

Where should I file my small claims lawsuit?

If the other party does business or lives in our state, the law typically requires you to file your lawsuit in the small claims court district closest to that person’s residence or business headquarters. In some cases, you also may be able to file in the district where a legal agreement was signed or the dispute in question occurred. Check with the local small claims clerk for more detailed information.

Note that if the other party you are looking to sue has no business or other contact within our state, you’ll likely have to file your case in the state where the individual lives or does business. That said, unless the other party lives in a nearby state, out-of-state small claims lawsuits can be cost prohibitive due to travel expenses, so be sure to factor in the cost of traveling before you file your claim.

How does the small claims court process work?

First, let’s get clear on some terminology. The person who initiates the claim is the plaintiff, and the person who is being sued is the defendant. The process begins when the plaintiff files a statement of claim with the county or district where the case will be held. You can typically get all of the necessary paperwork for filing your claim from our local clerk of court website. You’ll also need to pay court fees, but they’re typically small, ranging from $20 to $200. There are also now apps that will help you file your small claims court case.

Once filed, the court may schedule an initial pretrial conference and/or order the parties to mediation. If the case can’t be resolved via mediation, the court will set a trial date, which will typically be a month or so from the time the claim was filed.

Small claims procedures vary by state and district, but in general, the hearings are fairly informal and don’t involve complicated legal procedures or strict rules of evidence. That said, you still need to prepare and present your case before the judge. Be sure to bring all of the documentation needed to help prove your case, such as contracts, invoices, photos of damages, copies of emails, and/or sales receipts. Some states also allow you to call witnesses.

One of the biggest advantages of small claims court is the time it takes for your case to be decided. Unlike traditional civil court, where cases can drag out for months or even years, a small claims judge will typically issue judgment on the spot, once both sides have presented their arguments and evidence.

Do I need an attorney?

Small claims court is designed to be easy to navigate, without the need for an attorney. Indeed, avoiding costly attorney’s fees is one of the primary benefits of these courts. For this reason, some states even prohibit lawyers from being present.

Of course, if you are going to file a case in small claims court and you are a Family Business Lawyer client, you should definitely call and discuss your strategy with us first, and we can advise you about how to proceed, and/or assist with collecting a judgment.

How do I collect a judgment?

Unfortunately, the court won’t collect your money for you. If you win your case and are awarded a judgment, unless the defendant agrees to pay you or you both agree to a payment plan, you may have to go back to court to get a lien on the defendant’s property or have the court order a wage garnishment.

As your Family Business Lawyer™, we can offer you support and guidance on the best ways to collect on your judgment to ensure you get all the money you are owed.

Can I appeal my case if I lose?

In many states, the plaintiff cannot appeal if he or she loses. If the defendant loses, he or she can generally file an appeal, and if it’s accepted, a new trial will be held in a higher court. Upon appeal, the small claims court trial is completely negated, as if it never happened. 

We’re Here If You Need Us

As your Family Business Lawyer™, we can help you decide whether or not to take your particular dispute to small claims court, as well as help you prepare your case. And while you likely won’t need us during the trial, we’re here to support you in whatever way you might require, providing you with the best chance to win your case and collect on your judgment. Contact us today to learn more.

This article is a service of Liz Smith, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule your appointment at 907-312-5436, or find a time for us to call you

The road to retirement is a long one, and as with any journey, it helps to have a few key milestones along the way to help gauge your progress. While your individual retirement plan and goals will be unique to your income, family situation, and desired lifestyle, most Americans share a number of common retirement milestones.

These milestones are based on your age, along with important dates and deadlines related to Social Security benefits, Medicare, and tax-advantaged retirement plans. Although you should work with us, your Personal Family Lawyer® and financial advisor to develop a comprehensive retirement strategy as part of your overall Life & Legacy Plan, we include several of the key milestones here.

That said, if you are a business owner, your primary investments are going to be in your business, so you can turn it into a machine that can run without you for extended periods of time. At first, this may be just to take vacations or handle family emergencies, but eventually, you’ll want to have the freedom to retire entirely, sell the company, or transfer it to the next generation. If this is your situation, your retirement milestones will be much different than those shared here, and they should be considered in the context of our LIFT (legal, insurance, financial, and tax) Planning for your business. If you own a business, please contact us for support with LIFT planning.

However, if you work for someone else, or your income is otherwise dependent on being employed, here are several key milestones to consider as your plan for retirement.

Age 21 to 49: Make savings a habit

The key to having a comfortable retirement is by saving as much as possible as early in your career as possible. Time, tax breaks, and compounding interest all add up, and by getting into the habit of saving when you are young, it will be exponentially easier to reach vital retirement goals as you get older.

With this in mind, one of the most important things you can do at this age is to take full advantage of employer-sponsored retirement accounts, such as 401(k)s, 403(b)s, IRAs and other tax-advantaged plans, especially if your employer offers a match. A common rule of thumb is that you should save at least 15% of your pre-tax income each year. If that’s not possible, then save as much as you can—and at least enough to get the full benefit of your employer’s matching contribution if one is offered. 

For 2022, you can contribute up to $20,500 to your 401(k) or 403(b) plan, while the contribution limit for both traditional IRA and Roth IRAs is $6,000. Since you are likely to be in the workforce for several decades, you’ll have a higher tolerance for market volatility and risk, so you will likely want to consider investing with a focus on maximizing growth, rather than taking a more conservative approach. 

Age 50: Catch-up contributions begin
Once you reach 50, you are likely in your peak earning years, so you should be maxing out your contributions to tax-advantaged retirement accounts. To help you achieve this, the IRS allows those age 50 and older to make an extra annual “catch-up” contribution.

In 2022, the catch-up contribution limit for a 401(k) or 403(b) is $6,500, which gives you a total contribution limit of $27,000 annually. For traditional IRAs and Roth IRAs, the catch-up contribution is capped at $1,000, which equates to a total limit of $7,000 annually. 

Since you are likely nearing retirement age, you will have less tolerance for risk, so you may want to consider revisiting your retirement portfolio to determine if it’s the right time to start making a gradual shift from investing primarily for growth to a more conservative strategy that’s focused primarily on generating income. And if you haven’t already, now is the time to find a financial advisor, who in conjunction with us, can support you in planning for and reaching your retirement savings goals.

Age 55: 401(k) withdrawals possible under the Rule of 55

Although you generally must wait until age 59½ to make withdrawals from your 401(k) without incurring a 10% penalty, the IRS allows for a “separation of service” exception for certain workers. Also known as the Rule of 55, if you quit, were laid off, or otherwise terminated from your job during or after the year you turn 55, you can take withdrawals from your 401(k) or 403(b) penalty-free from the account associated with that job.   

That said, you are still required to pay income taxes on any withdrawals from your 401(k) or 403(b) in the year they were taken. Moreover, IRAs are not eligible for this exception, and for those accounts, you must wait until age 59½ to take withdrawals without any penalty.

Age 59 1/2: Penalty-free retirement account withdrawals begin

Outside of the “separation of service” exception, this is the age when you can begin taking withdrawals from your retirement account, such as a 401(k), 403(b), and IRAs, without the 10% early withdrawal penalty. While you are free to make penalty-free withdrawals from your retirement account starting at this age, you are not required to make any withdrawals until age 72.

Though not subject to a 10% penalty, all withdrawals from your retirement accounts are subject to federal income taxes in the year you make them. Given this, you may want to consider setting aside some of the withdrawal to pay taxes.

Age 62: Social Security eligibility begins

This is the earliest age you can begin claiming Social Security retirement benefits. However, if you take Social Security early, your monthly benefit will be reduced by as much as 30%, depending on your date of birth. Conversely, your benefit amount increases each year until you start claiming benefits, or when you reach age 70, whichever comes first.

The age at which you are eligible for 100% of your Social Security benefit is known as your full retirement age. The full retirement age used to be 65, but in 1983, the law changed and gradually pushed the full retirement age up to 67, depending on the year you were born. As such, the dates below show your full retirement based on your birth date. 

Year of birth:        Age to receive full Social Security benefits

1943-1954: 66 

1955: 66 and 2 months 

1956: 66 and 4 months

1957: 66 and 6 months 

1958: 66 and 8 months

1959: 66 and 10 months

1960 or later: 67

Age 64 3/4: You can enroll in Medicare

You can enroll in Medicare at any point during the seven-month period that begins three months before the month you turn 65. Medicare is our government’s basic health insurance program for those age 65 or older.

Unless you are still covered by the health insurance of your employer or your spouse’s employer, you should consider enrolling in Medicare during this seven-month window to cover expenses related to inpatient hospital care, doctor visits, outpatient care, and prescription drugs. If you do not enroll during this initial window, you may have to pay higher premiums for life should you choose to enroll later on.

That said, if you still have health insurance from your employer or your spouse’s employer, you can postpone enrolling in Medicare until that coverage ends, without having to pay higher premiums.

Age 65: Medicare begins and you can enroll in Medigap

If you enrolled in or are receiving Social Security, you qualify for Medicare coverage on the first day of the month in which you turn 65, regardless of whether or not you are retired. On that same day, the six-month enrollment window for the Medicare supplemental insurance known as Medigap also begins. Medigap is private insurance that helps you cover a portion of the out-of-pocket copays and deductibles of traditional Medicare.

If you plan to continue working after age 65 and are covered by your employer’s health insurance plan (or your spouse’s), speak with the employer and your benefits coordinator to see how signing up for Medicare would affect that coverage. Depending on the size of the employer, you may be entitled to a special enrollment period of up to eight months after the employer-tied coverage ends to sign up for Medicare with incurring a penalty.  

Age 70: File for Social Security, if you haven’t already
As mentioned earlier, the longer you wait to claim Social Security between your full retirement age and age 70, the higher your benefits will be. In fact, your benefits increase by 8% for each year you wait between your full retirement age and 70. But once you reach 70, your benefits no longer increase, so don’t put off filing for Social Security past this age.

Age 72: Required minimum distributions (RMDs) begin

Once you reach 72, you are required by law to begin taking distributions from tax-deferred retirement accounts, such as a 401(k), 403(b), and traditional IRA. These are known as required minimum distributions (RMDs), and your first distribution must be taken by April 1 of the year you turn 72. Thereafter, annual withdrawals must be taken by December 31 of each year.

Note: RMDs don’t apply to Roth IRAs, because contributions to these accounts are made with after-tax dollars. 

It’s extremely important to stay on top of your RMDs, because if you miss one, you could owe a penalty of up to 50% of the amount you should have withdrawn. The amount you must withdraw for your RMD depends on the balance in your account and your life expectancy as defined by the IRS.

To calculate your RMD, visit the IRS website, and refer to the table in IRS Publication 590-B. From there, locate your age in the table, and find the “life expectancy factor” that corresponds to your age. Then, divide your retirement account balance as of December 31st of the previous year by your current life expectancy factor. This should give you the amount of your RMD.

Start Planning For Retirement Now & Consider Creating a Work-Until-You-Die-Happy Plan

While all of these recommendations relate to you saving enough for retirement, your best bet to ensure your retirement years are as plentiful as possible is to create a reality with your work life that you never have to retire from. Instead, consider how you can invest in education and training that will support you to happily contribute your skills and continue to get paid through the rest of your life. 

Work-until-you-die might sound like a terrible plan, but only if you don’t love your work. If you do love your work, contributing your talents until you die (and getting paid for it) is a great plan for a life worth living and a legacy worth leaving. And it will keep you younger and healthier far longer than working at a job you dread, but have to stay in to earn a living.

If you are relying on a work-until-you-die plan (rather than saving enough to stop working), make sure you have plenty of long-term care and disability insurance in place to cover your needs in the event that you cannot work. We’ll write future articles on long-term care insurance and disability insurance that will help you to choose the right coverage. And if you need a referral to a great insurance advisor for these types of coverage, please contact us, as we provide this support to all of our clients.

Consider What’s At Stake
When preparing for your senior years, it’s not enough to simply hope for the best. You should treat retirement planning as if your life depended on it—because it does. Without an effective plan, you risk a future of poverty, penny pinching, dependence, and even an early death due to unhappiness. The stakes could hardly be higher.

While the best way to ensure a comfortable retirement is to start planning (and saving or building a work-until-you-die-happy plan) as soon as possible, it’s also critical to seek the guidance and support of professionals, who can help you develop strategies to maximize your investments and savings, while minimizing taxes and avoiding common pitfalls. As your local Personal Family Lawyer®, we will work with you and your financial advisor to educate and empower you to choose the most effective planning strategies to ensure your journey to retirement is as smooth as possible.

And if you need help finding a financial advisor, we will introduce you to the experienced professionals we trust most. With their support and ours, you will have peace of mind that you and your family will be well-protected and well-planned for no matter what. Contact us today to get started.

This article is a service of Liz Smith, Personal Family Lawyer® in Juneau, Alaska. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Life & Legacy Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today at 907-312-5436 to schedule a Life & Legacy Planning Session and mention this article to find out how to get this $750 session at no charge; or book a time for our team to call you at a time you choose.

When running a small business, every dollar counts, so it’s critical to keep a tight rein on your expenses, especially when you are just starting out and have limited revenue. If not monitored carefully, spending can quickly get out of control and put a serious strain on your operation’s financial health.

Outside of hiring an experienced bookkeeper to keep track of your expenses and monitor areas where you might be bleeding cash, there are several other ways you can keep your expenses in check. And you don’t need an accounting degree to put these strategies into practice.

With this in mind, here are five cost-cutting measures that can help your company stay in the black.

1. Encourage Remote Work

During the pandemic, telecommuting and remote work became the norm rather than the exception. And even now that the shutdowns are over, many companies are choosing to keep a large number of their workers at home or adopt a hybrid approach, allowing employees to work both from home and in the office.

One of the main reasons for this shift lies in the tremendous potential to cut costs. In fact, according to Global Workplace Analytics, employers can save up to $11,000 per year for each employee working remotely at least half-time. Beyond the direct cost savings, remote work also improves employee morale and job satisfaction, both of which help boost productivity—and in turn, your bottom line.

If remote work is possible for your company, you should seriously consider taking advantage of the reduction in overhead and expenses, as well as the improved morale and productivity it can provide. The following are some of the primary ways telecommuting can reduce your company’s expenses: 

  • Reduces utility costs through lower electricity, internet, phone, and water usage
  • Reduces the amount of office space (and real estate costs) required to house employees
  • Reduces bill for cleaning services with fewer staff onsite
  • Reduces office supply and food costs
  • Reducing commuting costs for employees
  • Reducing time lost to commuting

2. Utilize Independent Contractors

Employees are typically among your company’s biggest expenses. In addition to the costs related to recruiting, hiring, and training, you also have to foot the bill for their payroll taxes, as well as paying for unemployment insurance, workers’ compensation, and disability. Given these costs, one of the best ways to reduce labor expenses is to use independent contractors (ICs) whenever possible.

In addition to saving on payroll taxes and employment insurance, you also don’t have to offer ICs benefits and other perks, such as health insurance, retirement plans, and paid time off, nor do you have to provide them with equipment and office space. All of this seriously adds up, with studies showing that you can save up to 40% or on total labor costs by using ICs.

Plus, with the advent of the gig economy and online work-for-hire platforms, finding qualified ICs is easier than ever. That said, it’s imperative that you construct your working relationship with your ICs properly and have solid employment agreements in place when working with contractors, or you risk facing serious penalties that can end up costing you far more than what you save on labor. To this end, be sure to consult with us, your local Family Business Lawyer for guidance and support before you start bringing on ICs or to clean up your current agreements. 

3. Pay Invoices Early

You might be surprised by how many vendors are willing to give you small but meaningful discounts for paying your invoices early. For example, it’s common practice for vendors to offer a 2% discount when you pay your invoice in full within 10 days, instead of the typical 30 days. This discount is often represented by the terms  “2/10 net 30” on the invoice.

Paying invoices early also helps you establish strong relationships with vendors, which can open the door to even bigger discounts and more favorable payment terms down the road. Not only that, but paying on time helps you establish good business credit. And the better your credit, you are more likely to attract new vendors, investors, and lenders.

4. Use A Cash-Back Business Credit Card 

Speaking of credit, if you have a good credit score, you can qualify for business credit cards that offer cash-back rewards, and use those cards to pay for large or regular purchases for your business. The leading business cards offer between 1.5% to 3% cash-back on purchases, with some offering an even higher rate of return.

And if you travel a lot for business, you may want to look into business credit cards that reward you with airline miles instead, which can be just as—if not more—valuable than cash rewards. Provided you pay your balance in full each month and use them for purchases that you would have made anyway, these business cards basically offer you free money.

5. Take Full Advantage Of Tax Deductions

Although taxes are the single-biggest expense business owners face, you can greatly reduce your tax bill by taking full advantage of every possible business deduction. And there are a ton of deductions available, some of which you may not be aware of, including a few only available this year.

While you should work with us, your Family Business Lawyer and CPA to ensure you don’t miss out on any deductions, here are some of the business deductions you definitely should take advantage of whenever possible.

Utilities: Any utilities used for your business are fully deductible. This includes things like water, electricity, trash, telephone, and internet. And as long as you use at least some of the time for business, remember to put the cost of your cell phone on the expense side of your P&L statement too.

Insurance: You can deduct 100% of the cost of most types of business insurance. This includes many types of coverage: health insurance, general liability insurance, commercial property insurance, business interruption insurance, professional liability/malpractice insurance, cyber insurance, worker’s compensation insurance, and vehicle insurance.

Office rent: If you rent your business property, you can deduct your lease or rental payments from your income taxes. 

Office supplies: Office supplies, such as paper, pens, printer ink, staples, envelopes, office furniture, computers, printers, etc., can all be deducted.

Business interest: Whether it’s a business loan or a business credit card, you can fully deduct interest charges. You can also write off any additional fees or extra charges on your business bank account and business card, such as monthly service fees and annual credit card fees.

Travel expenses: Many expenses related to business travel are fully deductible, such as airfare, car rentals, lodging, tolls, and meals.

Business meals: In most years, business-related meals (food and beverages) are 50% deductible, but for 2021 and 2022 only, the cost of business meals served by a restaurant is 100% deductible. And as long as it’s from a restaurant, meals served via takeout and delivery qualify too—you don’t have to actually eat on the premises.

Advertising and marketing: Any money spent on advertising or marketing your business is fully deductible.

Professional services: Any fees for professional services for your business, such as legal, accounting, and bookkeeping, are deductible. Of course, this would include the fees you pay us, as your Family Business Lawyer, which can make our services even more affordable.

Keep Your Operation Lean

Outside of these measures, there are sure to be numerous additional ways you can streamline your finances. While it may sound funny given that we’re not cheap to work with, if you’re looking to cut unnecessary costs, and get the most bang for your business buck, start by sitting down with our firm for a LIFT Audit. 

As your local Family Business Lawyer, we’ll assess your current financial systems and advise you about additional ways you can shore up any weak spots in your company’s financial foundation. 
Staying on top of your finances in this way will not only prevent you from running out of money, and it will also free up your time and energy to focus on the big-picture responsibilities needed to ensure your business not only survives, but truly thrives. Contact us today to get started.

This article is a service of Liz Smith, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule your appointment at 907-312-5436, or find a time for us to call you

Because estate planning involves actively thinking about and planning for frightening topics like death, old age, and crippling disability, many people put it off or simply ignore it all together until it’s too late. Sadly, this unwillingness to face reality often creates serious hardship, expense, and trauma for those loved ones you leave behind. 

To complicate matters, the recent proliferation of online estate planning document services, such as LegalZoom®, Rocket Lawyer®, and, may have misled you into thinking that estate planning is a do-it-yourself (DIY) affair, which involves nothing more than filling out the right legal forms. However, proper estate planning entails far more than filling out legal forms. 

In fact, without a thorough understanding of how the legal process works upon your death or incapacity, along with knowing how it applies specifically to your family dynamics and the nature of your assets, you’ll likely make serious mistakes when creating a DIY will or trust. And the worst part is that these mistakes won’t be discovered until you are gone—and the very people you were trying to protect will be the ones stuck cleaning up the mess you created just to save a few bucks. 

Estate planning is definitely not a one-size-fits-all endeavor. Even if you think your particular situation is simple, that turns out to almost never be the case. To demonstrate just how complicated estate planning can be, last week in part one, we highlighted the first five of 10 of the most common estate-planning mistakes, and here we wrap up the list with the remaining five mistakes.

6. Not Updating Beneficiary Designations

In addition to reviewing and updating your core estate planning documents like your will, trust, and power of attorney, it’s crucial that you also update the documentation for your other assets, especially those with beneficiary designations. Some of your most valuable assets, like 401(k)s, IRAs, and life insurance policies, do not transfer via a will or trust. 

Instead, these assets have beneficiary designations that allow you to name the person (or persons) you’d like to inherit the asset upon your death. Oftentimes, people forget to change their beneficiary designations to match their estate planning goals, which can lead to disaster. For example, if you get remarried and forget to update your 401(k), your ex-spouse from 20 years ago could end up inheriting your retirement savings.

Additionally, some people assume that because they’ve named a specific heir as the beneficiary of their IRA in their will or trust that there’s no need to list the same person again as beneficiary in their IRA paperwork. Because of this, they leave the IRA beneficiary form blank or list “my estate” as the beneficiary. But this is a major mistake—and one that can lead to serious complications and expense for your loved ones.

It makes no difference who is listed as the beneficiary in your will or trust; you must list the person you want to inherit the asset in the beneficiary designation, or your heirs will have to go to court to claim the asset. 

And you should never name a minor child as a beneficiary of your life insurance or retirement accounts, even as the secondary beneficiary. If a child inherits assets, the assets become subject to control of the court until they reach the age of 18, and then, the assets are distributed outright without any protection or direction.

If you want a minor to inherit assets, you can create a special trust to hold the asset until the child comes of age, and name someone you trust to serve as a successor trustee to manage the assets until that time. As your Personal Family Lawyer®, we can support you to choose the appropriate trust for this purpose to ensure your child gets the maximum benefit from their inheritance.

7. Improper Execution
You could have the best estate planning documents in the world, but if you fail to sign them, or sign them improperly, they will fail. This might seem trivial, but we see it all the time. A loved one dies, their family brings their estate planning documents to us, and we can’t help them because the documents were either not signed or were signed improperly.

To be considered legally valid, certain estate planning documents like wills must be executed (i.e. signed, witnessed, and/or notarized) following very strict legal procedures. For example, many states require that you and every witness to your will must sign it in the presence of one another. If your DIY service doesn’t mention that condition (or you don’t read the fine print) and you fail to follow this procedure, the document can end up worthless.

8. Choosing The Wrong Executors Or Trustees
In addition to laws regarding execution, state laws are also very specific about who can serve in certain roles like executor, trustee, or financial power of attorney. In some states, for instance, the executor of your will must either be a family member or an in-law, and if not, the person you choose must live in the state. If your chosen executor doesn’t meet those requirements, he or she cannot serve.

Moreover, some states require the person you name as your executor to get a bond, which is like an insurance policy before he or she can serve. Such bonds can be difficult to get for someone who has a less-than-stellar credit score. If your executor cannot get a bond, it would be up to the court to appoint your executor, which could end up being someone you would never want managing your assets or a third-party professional, who could drain your estate with costly fees.

As your Personal Family Lawyer®, we will guide you to choose the most appropriate and qualified executors and/or trustees to manage your estate and assets.

9. Unintended Conflict Between Family Members
Family dynamics are—to put it lightly—quite complex. This is particularly true for blended families, where spouses have children from previous relationships. If you try to go it alone using a DIY document service, you won’t be able to consider all of the potential areas where conflict might arise among your family members and plan ahead to avoid such disputes. After all, even the best set of documents will be unable to anticipate and navigate these complex emotional matters—but we can.

Every day we see families end up in lifelong conflict due to poor estate planning. Yet, we also see families brought closer together as a result of handling these matters the right way. When done right, the estate planning process is actually a major opportunity to build new connections within your family, and our lawyers are specifically trained to help you with that. 

In fact, preventing family conflict with proactive estate planning is our special sauce and one of the many reasons to work with us, as your Personal Family Lawyer®, rather than relying on DIY planning documents, which will not identify nor prevent unforeseen family disputes. 

10. Failing To Properly Name Guardians For Minor Children
If you are a mom or dad with children under the age of 18 at home, your number-one estate planning priority should be selecting and legally documenting both long and short-term guardians for your kids. Guardians are the people legally named to care for your children in the event something happens to you.

If you haven’t named guardians for your kids yet, use the link  below to find out how you can take care of this critical task right now. And if you’ve named guardians for your minor children in your will—even with the help of another lawyer—your kids could still be at risk of being taken into the care of strangers. 

For instance, if you’ve named guardians for your kids in your will, what would happen if you became incapacitated and were no longer able to care for them? Did you know that your will only becomes operative in the event of your death, and it would do nothing to protect your children in the event of your incapacity?

Or perhaps the guardians you named in your will live far from your home, so it would take them several days to get there. If you haven’t made legally-binding arrangements for the immediate care of your children, it’s highly likely that they will be placed with the authorities until those guardians arrive. 

And does anyone even know where you will is located and how to access it? How can they prove they are your children’s legal guardians if they can’t even find your estate plan?

These are just a few of the potential complications that can arise when naming legal guardians for your kids, whether in your will or as a stand-alone measure. And if just one of these contingencies were to occur, your children would more than likely be placed into the care of strangers. Sadly, we see this happen even to those parents who’ve worked with lawyers to name legal guardians for their children, and that’s because most lawyers simply don’t know what’s necessary for planning and ensuring the well-being and care of minor children.

However, as your Personal Family Lawyer® firm, we have been trained by the author of the best-selling book, Wear Clean Underwear!: A Fast, Fun, Friendly, and Essential Guide to Legal Planning for Busy Parents, on legal planning for the unique needs of families with minor children. As a result of this training, we offer a comprehensive system known as the Kids Protection Plan®, which is included with every estate plan we prepare for families with young children.

The Kids Protection Plan® was created by a nationally recognized attorney, who is a mom herself, to make 100% certain that her kids would always remain in the loving care of people she knows and trusts and never be raised by anyone she didn’t want. And now, you can put this same plan in place for your kids. 

While you should meet with us to put the full Kids Protection Plan® in place as soon as possible, protecting your children is such a critical and urgent issue, we’ve created a totally free website, where you can visit to get your plan started right now.

⇒ If you’ve yet to take any action at all, visit this easy-to-use and 100% FREE website, where you can take the first steps to create legal documents naming long-term guardians for your children. By doing this, you can ensure that should anything happen to you prior to creating your full estate plan, your kids would be cared for by the people you would want in exactly the way you would want. Get started here now:

After you’ve completed that step, schedule a Family Wealth Planning Session™ with us, your Personal Family Lawyer®, so we can put the full Kids Protection Plan® in place. From there, we can determine if there are any other estate planning measures that your family might need to ensure the well-being and care of your children no matter what happens.

If you have already named long-term guardians in your will or as a stand-alone measure, either on your own or with a lawyer, we can review your existing legal documents to see whether you have made any of the most common mistakes that could leave your kids at risk. From there, we will revise your plan and put the proper protections in place to ensure your children are fully protected.

Life & Legacy Planning: Do Right By Those You Love Most
The DIY approach might be a good idea if you’re looking to build a new deck for your backyard, but when it comes to estate planning, it’s actually one of the worst choices you can make. Are you really willing to put your family’s well-being and wealth at risk just to save a few bucks?

If you’ve yet to do any planning, contact us, your Personal Family Lawyer® to schedule a Family Wealth Planning Session, which is the first step in our Life & Legacy Planning Process. During this initial meeting, we’ll take you through an analysis of your assets, what’s most important to you, and what will happen to your loved ones when you die or if you become incapacitated.

If, as a result of this process, we determine that you really do have a very simple situation and you want to create your own estate planning documents yourself online, we will support you to do that. However, if as a result of the process, you decide you would like us to create a plan for you, we’ll support you to find the optimal level of planning for a price that’s right for you.

And if you’ve already created an estate plan—whether it’s a DIY job or one created with another lawyer’s help—contact us to schedule an Estate Plan Review & Check-Up. With our support, we will ensure your plan is not only properly drafted and updated, but that it has all of the protections in place to prevent your children from ever being placed in the care of strangers or anyone you’d never want raising them.

In either case, working with us will empower you to feel 100% confident that you have the right combination of estate planning solutions to fit with your unique asset profile, family dynamics, and budget. As your Personal Family Lawyer® firm, we see estate planning as far more than simply planning for your death and passing on your “estate” and assets to your loved ones—it’s about planning for a life you love and a legacy worth leaving by the choices you make today—and this is why we call our services Life & Legacy Planning. Contact us today to get your plan started.

This article is a service of Liz Smith, Personal Family Lawyer® in Juneau, Alaska. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Life & Legacy Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today at 907-312-5436 to schedule a Life & Legacy Planning Session and mention this article to find out how to get this $750 session at no charge; or book a time for our team to call you at a time you choose.

If you have yet to put in place an estate and succession plan for your business, you’re going to leave the people you love most—your clients, your customers, your team, and your family—in the lurch when something happens to you. And while that probably won’t be tomorrow, it could be.

We get it—there are plenty of reasons to put off estate planning, and as business owners ourselves, we truly understand the common excuses for why you probably haven’t created your estate plan yet.But we also know what to do about it, so you don’t leave the people you love at risk. Read on for the top three excuses to avoid estate planning, and what you can do to overcome those excuses and do the right thing for the people you love now.

1. I don’t have enough time.

When running a company, it can be a serious challenge just to get all of your most-pressing daily tasks done on time. This is especially true in today’s fast paced business environment, where you move from one task, one meeting, one email, one phone call, one text to the next—and before you know it… a year has gone by, and then another, and it just keeps going. 

Hectic schedules can make it difficult to engage in forward-thinking, proactive business planning, especially estate and succession planning, which require deep introspective strategizing and can take many months, even years, to fully develop. And even if you do make time to create a plan, unexpected issues—accidents, illness, lawsuits, audits—often pop up that demand your urgent attention, and planning gets put off once again.

Estate planning is a big-picture, long-term process that naturally lends itself to procrastination, so a lot of business owners never get around to it. However, before you allow yourself to keep putting it off, consider how difficult it will be for the people you love—your clients, your team, and your family—if you become incapacitated or die without creating a plan. 

So how do you find the time? Let us handle it with you. Start by scheduling a Family Wealth Planning Session with us, during which we can guide you through our step-by-step process to inventory what you own, where it is, and how we can plan for the most affordable, effective, and easeful transition of your business in the event of your incapacity or death. 

2. My family & team don’t take planning seriously.

Although you do need to take the lead when creating your estate and succession plan, you will ultimately need input and action from family and key non-family team members. Given this, if your family and/or team don’t seem interested or resist your efforts to put a plan together, it’s easy to get discouraged.

In the end, you won’t be around for the trainwreck that’s likely to occur without a plan in place, so why should you bother if nobody else cares? However, you’re the boss for a reason, and now is the time to act like one.

It’s your job to lead and motivate your family and your team to treat planning with the respect it deserves. Of course, you’ll likely encounter some pushback, but as with any essential project, you must keep your eye on the ball and do whatever it takes to ensure your business and family can survive and thrive no matter what happens to you.

After you’ve completed our Life & Legacy Planning process, we’ll invite your family and key team members into the know, so they are fully aware of the parts of your plan that will impact them when something happens to you. Informing key people about your planning decisions is an integral part of our process, yet it’s often overlooked. We’ll ensure that doesn’t happen, and we’ll invite the key players into the planning process at the right time to ensure that everyone is on the same page and knows exactly what to do if something happens to you.

3. I don’t know what an effective estate and succession plan even looks like.

If you’ve seen a successful estate or succession plan, congratulations. That’s a rarity in today’s world. But chances are, you were not raised by a business owner who successfully passed on their business to the next generation. And if you weren’t, there’s no reason you would know what an effective estate and succession plan looks like.

A lack of clear understanding about any major endeavor frequently leads to fear of failure, and in turn, procrastination. Nobody, especially the boss, wants others to think they don’t know what they’re doing, and this is probably the biggest reason many business owners never get around to creating an effective plan.

When it comes to estate and succession planning, it can be difficult to identify clear goals for a future that doesn’t involve you. This is only natural. If planning were simply another operations’ issue that needed solving, you’d likely have a plan in place in no time at all. However, multi-generational planning is by default something you’re almost certainly unfamiliar with.

This can make it feel impossible to even know where to start with your plan, much less identify what problems might arise and how to address them. But you have to start somewhere.

This is where experienced business lawyers like us come in. As your Family Business Lawyer™,  we will support and guide you to create a comprehensive estate plan to ensure the company, wealth, and legacy you are working to build will last long after you are gone. Specifically, this involves putting in place a long-term business succession plan that not only names your successor, but also provides a detailed roadmap for him or her to follow, when you’re no longer around to offer your guidance and advice.

Stop Making Excuses

If you’re guilty of using any of these excuses for not creating an estate and succession plan, it’s understandable. But to make things as convenient as possible, we’ve removed all of the barriers for you. For example, we’ve made it easy for you from a time perspective. Just schedule a 15-minute call to start, and we’ll take it from there. We’ll help you know exactly what to do, and we’ll ensure that your key decision-makers know what to do as well, if and when something happens to you.
And if you already have an estate plan—even one created with another lawyer—in place, you should have us review it to make sure you’ve actually covered all your bases. With our support, you can not only shield your company and family from unforeseen tragedy, but also achieve the peace of mind needed to take your company to the next level. In this way, you can ensure that the business and legacy you worked so hard to build will not only survive, but actually thrive for the next generation and beyond. Schedule your 15-minute call today to get the ball rolling.

This article is a service of Liz Smith, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule your appointment at 907-312-5436, or find a time for us to call you

Because estate planning involves actively thinking about and planning for frightening topics like death, old age, and crippling disability, many people put it off or simply ignore it all together until it’s too late. Sadly, this unwillingness to face reality often creates serious hardship, expense, and trauma for those loved ones you leave behind. 

To complicate matters, the recent proliferation of online estate planning document services, such as LegalZoom®, Rocket Lawyer®, and, may have misled you into thinking that estate planning is a do-it-yourself (DIY) affair, which involves nothing more than filling out the right legal forms. However, proper estate planning entails far more than filling out legal forms. 

In fact, without a thorough understanding of how the legal process works upon your death or incapacity and applies specifically to your family dynamics and the nature of your assets, you’ll likely make serious mistakes when creating a DIY will or trust. And the worst part is that these mistakes won’t be discovered until you are gone—and the very people you were trying to protect will be the ones stuck cleaning up the mess you created just to save a few bucks. 

Estate planning is definitely not a one-size-fits-all endeavor. Even if you think your particular situation is simple, that turns out to almost never be the case. To demonstrate just how complicated estate planning can be, here are 10 of the most common estate planning mistakes, starting with the worst blunder of all: failing to create an estate plan.

1. Leaving No Estate Plan At All
If you die without an estate plan, the court will decide who inherits your assets, and this can lead to all sorts of problems. Who is entitled to your property is determined by our state’s intestate succession laws, which hinge largely upon whether you are married and if you have children. Spouses and children are given top priority, followed by your other closest living family members.

If you are single with no children, your assets typically go to your parents and siblings, and then more distant relatives if you have no living parents or siblings. If no living relatives can be located, your assets go to the state. It’s important to note that state intestacy laws only apply to blood relatives, so unmarried partners and close friends would get nothing. If you want someone outside of your family to inherit your assets, having a plan is an absolute must.

If you’re married with children and die with no plan, it might seem like things would go fairly smoothly, but that’s not always the case. If you’re married, but have children from a previous relationship, for example, the court could give everything to your spouse and leave your children with nothing. In another instance, you might be estranged from your kids or not trust them with money, but without a plan, state law controls who gets your assets, not you.

Moreover, dying without a plan could also cause your surviving loved ones to get into an ugly court battle over who has the most right to your property. Or if you become incapacitated, your loved ones could even get into conflict around your medical care. You may think this would never happen to your loved ones, but we see families torn apart by it all the time, even when there’s not significant financial wealth involved.

As your Personal Family Lawyer®, we will help you create a plan that handles your assets and your medical care in the exact manner you wish, taking into account all of your family dynamics, so your death or incapacity won’t be any more painful or expensive for your family than it needs to be.

2. Thinking A Will Alone Is Enough
Lots of people, particularly older folks, believe that a will is the only estate planning tool they need. While a will is a fundamental part of nearly every adult’s estate plan, which can ensure that your assets go where you want them to go in the event of your death, using a will by itself comes with some serious limitations, including the following:

  • Wills require your family to go through the court process known as probate, which can not only be lengthy and expensive, it’s also completely open to the public and frequently creates ugly conflicts among your loved ones.
  • Wills don’t offer you any protection if become incapacitated by illness or injury and are unable to make your own medical, financial, and legal decisions.
  • Wills don’t cover jointly owned assets or those with beneficiary designations, such as life insurance policies and 401(k) plans.
  • Wills don’t provide any protection or guidance for when and how your heirs take control of their inheritance.
  • Naming guardians for your minor children in your will can leave them vulnerable to being placed in the care of strangers.

Given these facts, if your estate plan consists of a will alone, you are missing out on many valuable safeguards for your assets, while also guaranteeing your family will have to go to court if you become incapacitated or when you die. Fortunately, all of the above issues can be effectively managed using a trust. That said, as you’ll see below, trusts are by no means a panacea—these documents come with their own unique drawbacks, especially if you try to prepare one on your own.

3. Creating A Trust & Not Properly Funding It
Many people now know that a trust can keep your family out of court, and you may think you can just go online to set up your own trust, or have a lawyer do it with you as a one-size-fits all solution. And while that might be true, particularly if you have very simple assets and few family members, even in that case, you are likely to overlook one of the most important parts of creating a trust: “funding” it.

An unfunded trust is a trust that exists, but that doesn’t hold any of your assets because you didn’t retitle them properly, or because you acquired new assets after creating your trust. This is all too common, and if this is true for you, it will leave your family with a big mess, even though you have officially created your trust. 

Funding your trust properly is extremely important, because if any assets are not properly funded, the trust won’t work, and your family will have to go to court in order to take ownership of that property. And when you acquire new assets after your trust is created, you must make sure those assets are properly funded into your trust as well.

While many lawyers will create a trust for you, few will ensure your assets are properly inventoried and funded into your trust, and even fewer will ensure the inventory of your assets is kept up-to-date as your life and assets change over time. This might sound crazy, but it’s actually common practice among many estate planning firms—but not ours.

As your Personal Family Lawyer® law firm, we will not only make sure all of your assets are properly titled when you initially create your trust, but we will also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust. This keeps your assets from being lost, and prevents your family from being inadvertently forced into court because your plan was never fully completed.

In light of these facts, if your estate plan includes a trust, it’s critical to work with us, your local Personal Family Lawyer® to ensure it works exactly as you intended.

4. Not Leaving An Up-To-Date Inventory Of Assets

As mentioned above, even if you’ve properly funded your assets into your trust, your estate plan will be worthless if your heirs don’t know what you have or where to find it. In fact, there’s more than $58 billion dollars worth of lost assets in the U.S. Department of Unclaimed Property right now. And that’s all because someone died or became incapacitated without letting anyone know how to locate their assets. 

This is especially critical for digital assets like cryptocurrency, social media, email, and data stored in the cloud, because if you haven’t properly addressed these assets in your estate plan, there’s a good chance they will be lost forever if something happens to you. For all of these reasons, creating and maintaining a comprehensive inventory of all of your assets is a standard part of every estate plan we create. With our support, you can rest assured that your family will know exactly what assets you own and how to locate them should anything happen to you. 

But that’s not all. As your Personal Family Lawyer®, we will not only help you create a comprehensive asset inventory, we have systems in place to make sure that inventory stays consistently updated throughout your lifetime. This is such an important and urgent issue, we’ve even created a unique (and totally FREE) tool called a Personal Resource Map to help you get the inventory process started right now, by yourself, without the need for a lawyer.

To learn more, visit the Personal Resource Map website to watch a webinar by Ali Katz, founder of Personal Family Lawyer®, and then get your asset inventory started for free. That way, no matter what, if something happens to you, your family will know what you have, where it is, and how to find it.

Then, schedule a meeting with us, your Personal Family Lawyer® to incorporate your inventory with your other estate planning strategies.

5. Failing To Regularly Review & Update Your Estate Plan
In addition to keeping an updated asset inventory, it’s vital that you regularly review and update all of your planning documents. Far too often people prepare a will or trust , then put it into a drawer or on a shelf, and forget about it.

Yet, an estate plan is not a one-and-done deal. As time passes, your life circumstances change, the laws change, and your assets change, you must update your plan to reflect these changes—that is, if you want your plan to actually work for your loved ones and keep them out of court and conflict.

We recommend reviewing your plan annually to make sure its terms are up to date. And be sure to immediately update your plan following major life events like divorce, births, deaths, and inheritances. We actually have built-in processes to make sure this happens—be sure to ask us about them.

Beyond sheer necessity, an annual life review can be a beautiful ritual that puts you at ease, and helps you to set the course of your life and keeps your life on course, knowing that you’ve got your affairs in order, all handled, and completely updated each year.

Next week, in part two, we’ll wrap up our list of the 10 most common estate-planning mistakes. Until then, if you are ready to get your estate planning handled and taken care of the right way with ease and affordability, start by contacting us, your local Personal Family Lawyer® for a Family Wealth Planning Session. Your Family Wealth Planning Session is custom-designed to your assets, your family, your wishes, and to educate you on the best way to reach your objectives for the people you love most.

This article is a service of Liz Smith, Personal Family Lawyer® in Juneau, Alaska. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Life & Legacy Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today at 907-312-5436 to schedule a Life & Legacy Planning Session and mention this article to find out how to get this $750 session at no charge; or book a time for our team to call you at a time you choose.

When it comes to your company’s brand identity, nothing is more vital to your company than its name. By developing a highly catchy name for your business, you can quickly get your company recognized, remembered, and respected.

That said, coming up with the right name for your company involves a number of critical legal issues. After all, your name is among your company’s most valuable assets, and as such, it deserves the proper protections available under intellectual property law. 

First and foremost, you’ll want to trademark your company name, which can be done by  registering your business name with the U.S. Patent and Trademark Office (USPTO). However, registering a trademark with the USPTO can be a lengthy and complex process, especially if you aren’t familiar with intellectual property law.

With this in mind, while you should always work with an experienced business lawyer like us, your local Family Business Lawyer™ to officially register any trademark, here are four of the top issues to consider when choosing and trademarking your company name.

1. Registering Your Company Name vs Filing For a Trademark

You first need to understand that simply registering your business name with our state is not the same as filing for trademark protection. When registering your business name in our state, you’ll need to first check to determine if your chosen name, or something similar, is not already in use by another business.

From there, if your name is available, you’ll need to take a few additional steps to officially register and use your company name in our state, depending on whether you are a sole proprietorship, limited liability company (LLC), or corporation. But registering your business name with our state only protects the use of that name in this state, so other companies may still be free to use the name in other states.

On the other hand, filing for trademark protection for your company name allows you to exclude others from using the same—or highly similar—name as yours on a nation-wide level. Beyond that, federally registering your company name comes with a number of other benefits that we detail below.

2. How To Get A Trademark: Common Law Trademarks vs. Registered Trademarks

You actually become a trademark owner simply by being the first person to use your particular name or design in commerce. That is, your trademark—and the rights that go with it—are established by using it, not by registering it. 

However, such “common-law” trademark rights are quite limited and will typically be inadequate for most companies. Officially registering your name with the USPTO provides a number of advantages, such as being able to sue for monetary damages against other companies for trademark infringement and the ability to register your name in foreign countries, among other benefits. For this reason, it is always a smart move to officially register your trademark.

3. Choosing A Name That Will Gain Trademark Protection

Unfortunately, coming up with a trademarkable name isn’t as easy as simply finding a name that no other company has claimed yet. In order to gain trademark protection, your company name must have the proper characteristics, according to the USPTO standards.

Most importantly, your name must be unique enough to distinguish yours from other trademarks already in use. To this end, the USPTO employs a spectrum of “distinctiveness” to determine trademark eligibility, using the following categories and ranging from strongest “inherently distinctive” to weakest “merely descriptive.” If you’ve already come up with a name, check to see if it falls into one or more of the following categories:

Fanciful marks: A mark that is entirely invented and has no other meaning, making it inherently distinctive. Examples include Xerox and Exxon. Such marks are the most likely to be eligible for trademark protection.

Arbitrary marks: A mark consisting of a common word that is totally unrelated to the product or service being offered. Examples include Camel and Amazon. Arbitrary marks are less likely to be eligible for a trademark than fanciful marks, but still likely to be accepted.

Suggestive marks: A mark that “requires imagination, thought, or perception” in order to come to a conclusion about the nature of the products or services being trademarked. Examples include Kleenex and Q-tips. Depending on the mark, suggestive marks may or may not be unique enough to be eligible for trademark. 

Descriptive marks: A mark that is merely a description of—or has a direct connection to—the good or service being trademarked. Examples include Sweetarts and American Airlines. Descriptive marks are generally ineligible for trademark protection, unless you can demonstrate “acquired distinctiveness,” which often takes years of use in the market before being available for trademark.

The bottom line: Although choosing a company name that doesn’t directly describe your product or service may seem counterintuitive, given this spectrum, using a descriptive name is going to be extremely difficult, if not impossible, to trademark. As your Family Business Lawyer™, we can support you when coming up with a name that will have the highest possibility of gaining trademark protection.

4. Make Sure Your Name Is Available

If you come up with a highly distinctive name, don’t get too excited. The next step is to make sure no competitor is already using your name—or something highly similar. While you can use Google for your preliminary search, to definitely determine if your name is available, you’ll need to check with the USPTO.

To find out whether any business similar to yours has already trademarked the name you want, you should use the USPTO’s Trademark Electronic Search System (TESS). This database contains all active and inactive trademark registrations and applications, and it can help you decide whether to file an application for your particular trademark.

Keep in mind, however, that such a search can be complicated. While searching for the exact same trademark is fairly simple, searching for marks that might be regarded as confusingly similar requires some skill. Us, your Family Business Lawyer™ can ensure your search is done properly, so your registration has the highest chances of getting approved.

Enlist Our Help With Your Trademark Application
Although you can register a trademark on your own or with the help of a cheap, do-it-yourself (DIY) trademark registration service, the registration process is highly technical. In fact, the process consists of a number of detailed steps, which from start to finish, can take up to a year or more to complete. Rather than rolling the dice by trying to register your trademark on your own or with a DIY service, we recommend you save yourself the time, money, and hassle, and hire us to guide you through the process.

When you work with us, your Family Business Lawyer™ to get your trademark application handled, you will pay a flat fee that covers the entire process, from the initial search all the way to final registration, with no billable hours, hidden fees, or nasty surprises. And once you have your trademark registered, you will need to take steps to ensure your trademark rights aren’t infringed upon—and that’s something we can help with, too. 

As your Family Business Lawyer™, we will not only support and advise you step-by-step through the process of trademarking your name, but also help you enforce your ownership rights should your trademark ever be infringed upon. Finally we will also support you to maximize the value of not just your company name, but all of your intellectual property assets. Contact us today to learn more.

This article is a service of Liz Smith, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule your appointment at 907-312-5436, or find a time for us to call you

When you think about loved ones who’ve passed away, you probably don’t think very much—or even at all—about the “things” they’ve left you. And when they do leave something behind, what you likely cherish most about the object are the memories and feelings the item evokes, not the thing itself.

For the founder and CEO of New Law Business Model, Ali Katz, the most treasured memento her late father left her wasn’t even something he intended to be special—it was just a random voicemail on her cellphone. And the message wasn’t meant to be anything sentimental.

His message simply said, “Lex, it’s your dad. Call me back.”

Following his death, Ali loved listening to that message to hear her father’s voice. Of all the assets he left behind, that tiny voicemail was what she cherished most.

Until one day, she went to listen to the message and discovered it had been erased—and her father’s voice was lost to her forever. She still recalls that day as one of her worst ever. Yet like most painful events, it taught her an important lesson.

Losing that voicemail ultimately inspired Ali to build a special new feature into her family-centered model of estate planning, known as the Family Wealth Legacy Interview.

Family Wealth Legacy Interviews: Sharing Your Family’s Unique Story

As your Personal Family Lawyer®, we recognize that estate planning isn’t just about protecting and passing on your financial wealth and other tangible assets when you die. When done right, estate planning supports you to pass down the most precious assets of all—your life stories, lessons, insights, and values—and done so intentionally. That’s why we call it Life & Legacy Planning, not just estate planning.

To collect and preserve what truly matters most, we include a unique service in every estate plan we create for our clients. When you plan with us, we will personally guide you to create a customized recording for the people you love—far more in-depth than Ali’s dad’s two-second message—in which you share your most insightful lessons, memories, and experiences. From there, we will provide you with the recording digitally to ensure it will survive long after you—and your money—are gone. 

And don’t worry, if this sounds overwhelming or difficult in any way, it’s not. Our clients consistently tell us they are surprised about how easy it was, and how quickly they were able to create a truly meaningful gift for the people they love. But most importantly, what they also tell us is that it brings more intention and awareness to how they want to pass on their values, insights, stories, and experiences to the people they love on a day-to-day basis going forward.

Best of all, the Family Wealth Legacy Process is offered at no additional cost to you, since it is part of each plan we create for our clients. And the process of documenting this recording is as easy and convenient as possible: We use a series of helpful questions and prompts, which makes the process both easy and enjoyable. From start to finish, the entire process takes less than an hour. 

My favorite part about this process is that most of our clients tell us that going through it helps them rekindle life moments and memories they would otherwise not share with their loved ones. Indeed, this unique process can enrich your family with something far more valuable than any tangible asset you might leave, and instead leave behind a lasting legacy of love. 

Life & Legacy Planning

In the end, your family’s most precious wealth is not money, but the memories you make, the values you instill, and the lessons you hand down. And left to chance, these assets are likely to be lost forever just like Ali’s voicemail from her father.

That said, recording your Family Wealth Legacy Interview is just a start. To protect and preserve your family’s tangible wealth and other assets, you should create a comprehensive estate plan. Yet, we’ve discovered that “estate planning” is really a misnomer. When done right, it’s really about planning for a life you love and a legacy worth leaving by the choices you make today—which is why we call it Life & Legacy Planning.

Your Life & Legacy Plan goes far beyond simply creating documents and then never seeing us again. We will develop a relationship with you and your family that lasts not only for your lifetime, but for the lifetime of your children and their children if that’s your wish. And this all starts with our Family Wealth Planning Session. If you’d like to learn more about this process or schedule your appointment, contact us, your local Personal Family Lawyer® today.

This article is a service of Liz Smith, Personal Family Lawyer® in Juneau, Alaska. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Life & Legacy Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today at 907-312-5436 to schedule a Life & Legacy Planning Session and mention this article to find out how to get this $750 session at no charge; or book a time for our team to call you at a time you choose.

Of all the different choices you have to make when starting a new business, arguably none is more critical or has a more significant impact on your success or failure than your choice of business entity structure. The entity you choose will affect everything from the amount of taxes you pay and the type of records you are required to keep to how vulnerable your personal assets are to the legal and financial liabilities incurred by your company, and even your ability to finance your venture.

When choosing between the different entity types, you will be considering one of the following structures: a sole proprietorship or partnership (the default choices if you do nothing), a corporation or limited liability company (LLC). You may notice that we did not mention an S-corporation, B-corporation, public-benefit corporation or nonprofit, or even a trust here. And that’s because S-corporations, B-corporations, public-benefit corporations and nonprofits are all types of corporations, and while a trust can be an owner of an entity, it is not the entity itself.

You can think of the legal entity you choose for your company as the container for your business, which is distinct from how that container is owned (which could be through a trust or by you individually), and it is also distinct from how that entity is taxed (which could be as an S-corporation or as a tax-exempt nonprofit).

Last week, in part one, we discussed the first two of five questions you should ask yourself when choosing the legal entity for your company, and here we’ll cover the three remaining questions. While these questions can help you narrow down your choice of entity, you should always consult with us, your Family Business Lawyer™ before making your final decision.

3. How Would You Prefer To Be Taxed?

Similar to your liability exposure, your choice of entity also dictates how your business is taxed. As we mentioned last week, if your business is a sole proprietorship or a partnership, you and the other owners are legally the same as your business, so your share of the company’s profits or losses are reported on your personal income tax return and taxed at your personal income tax rate.

In contrast, as a C-corporation, your business is considered a separate legal entity from you and the other owners for both liability and taxation purposes. As a result, the corporation pays taxes at the new flat corporate tax rate of 21% established by the Tax Cuts and Jobs Act. Then, after-tax profits are distributed to the shareholders, and those profits are taxed at the personal rate of each of the shareholders. This system of “double taxation” means the corporation first pays tax at its rate, and then the shareholders pay tax at their own individual tax rates.

However, due to the expense and complexity of creating and maintaining a traditional corporation, very few small or mid-sized businesses are set up as C-corporations. Fortunately, you can still obtain the liability protection and tax advantages offered by a C-corporation by setting your business up as an LLC.

As an LLC, you have flexibility in choosing how you’ll be taxed. Unless you choose to be taxed as a corporation, single-member LLCs are automatically taxed as sole proprietorships, while multi-member LLCs are taxed as partnerships. In either case, your company doesn’t pay any taxes on its profits itself. Instead, your share of the net business income is taxed on your personal tax return, and you’ll pay taxes based on your personal income tax rate.

Alternatively, you can also elect for your LLC to be taxed as an S-corporation. In this case, you will file a tax return on behalf of the corporation, reporting all income and expenses on that return. But the entity will not pay taxes. Instead, the business will issue you a K-1, indicating the net profit, which will be taxed as ordinary income on your personal return. 

The main advantage of choosing to be taxed as an S-corporation is that you only pay payroll taxes on your payroll, not on your profit distributions from the company. Whereas, if you are taxed as a sole proprietorship, all profits are considered payroll and subject to payroll taxes. In addition, the audit risk for S-corporations is typically less than the audit risk for companies taxed as sole proprietors, where income and expenses are reported on your personal Schedule C.

If your business is taxed as an S-corporation, you will pay income taxes on your profit distributions, but you would save roughly 15% in payroll taxes on distributions taken as profits, rather than as payroll, since you don’t pay payroll taxes on income taken as a profit distributions. In contrast, when using an LLC taxed as a partnership or sole proprietorship, you will pay payroll taxes on all distributions to you from the LLC up to the payroll tax limits.

That said, for an S-corporation election to make sense, you’ll want to have at least $60,000 or so of net income per year. If you are close to that amount and have not yet filed an S-corporation election, be in touch with us, so we can get you supported. Otherwise, to help you choose the entity that’s most advantageous for tax purposes, meet with us, your Family Business Lawyer™ or Certified Public Accountant (CPA) to discuss all of your options.

4. What Kind Of Records Are You Willing To Maintain?

While sole proprietorships and partnerships don’t offer any liability protection from the liabilities or activities of the business, both entities are extremely simple to set up and maintain. For example, if you start a new business and are the only owner, you are automatically a sole proprietorship in the eyes of the law, and you are automatically a partnership if you have more than one owner. In either case, there’s no need for you to register your business with the state, file any paperwork, pay any fees, and there are no special rules to follow.

Although LLCs and corporations offer liability protection and tax advantages, those benefits do come with specific administrative and reporting requirements known as corporate formalities. These formalities dictate how the entity must be structured, maintained, and managed. If you fail to adhere to these formalities, the court could remove the protective barrier shielding your personal assets, known as “piercing the veil,” leaving you personally liable to creditors in the event of a judgment.

C-corporations come with the strictest and most extensive administrative formalities. For example, you must file articles of incorporation with the state, hold a regular board of directors and shareholder meetings, create and enact corporate bylaws, and maintain detailed record-keeping requirements, such as keeping meeting minutes. Beyond that, you must also file annual financial reports with the state and pay yearly fees to maintain your corporate status.

LLCs also come with administrative formalities, but they aren’t nearly as burdensome as those for C-corporations. As the owner of an LLC, for instance, you must file articles of organization with the state and create an operating agreement, which governs how your LLC is structured and run. In addition, all states require LLCs to file either an annual or semi-annual report with the state agency responsible for registering business organizations.

Although there’s no statutory requirement for LLCs to hold owner meetings or keep minutes, doing so provides strong evidence that you’re abiding by corporate formalities. And by combining diligent record-keeping with clear separation of your personal and business finances, you can give your LLC extra protection from creditors.

Should you choose to set up as an LLC or corporation, as your local Family Business Lawyer™, we can offer you support with maintaining your business records and keeping up with the required corporate formalities. In fact, we offer special maintenance packages that make meeting these requirements a snap, while maintaining the maximum level of protection for your personal assets.

5. How Do You Plan To Finance Your Business?

One final issue that your choice of entity will affect is your ability to finance your business. When securing funding, you must first decide what form of investment is right for your company: equity or debt. Specifically, are you looking for an investment in exchange for an equity stake in your company (equity), or would you be better off getting a loan to fund your business (debt)?

That said, if you choose to set up your company as a sole proprietorship or partnership, you will most likely be limited to financing your business with a debt investment, since most investors—banks included—will be extremely reluctant to invest in businesses set up using these entities. And once again, this is mainly due to the lack of liability protection offered by sole proprietorship and partnerships. 

When funding a business, investors want to minimize their risk and maximize their return. To this end, investors typically prefer to fund business entities that offer their owners liability protection, because in those cases, they wouldn’t have to go after your personal assets if you are unable to pay back the loan. Personal assets are generally harder to seize than business assets in case of a default.

In addition to liability protection, entities like corporations and LLCs offer your company enhanced credibility and legitimacy, which is another attractive feature for investors. Given the financial investment and administrative formalities that are required to set up and maintain these entities, corporations and LLCs show that you take your operation seriously, and you are willing to invest both money and time to structure your business properly. 

For these reasons, if your company is set up as a sole proprietorship or partnership, you’ll most likely have to rely on loans from personal sources, such as from friends and family, home equity, or credit cards. And while LLCs offer their owners liability protection and enhanced credibility, unlike corporations, owners of LLCs, even those taxed as S-corporations, cannot issue shares of stock in their company. So even though an LLC might be a more attractive investment opportunity than sole proprietorships and partnerships, if you own an LLC, you’ll most likely need to rely on debt-based financing as well.

Most banks won’t offer you a loan unless your business can show at least two years or more of income. However, these days there are numerous different types of alternative financing available for small businesses, including crowdsourcing, peer-to-peer lending, SAFE investments, SBA loans, invoice financing, and credit-card stacking, among others. Regardless of the entity you have set up, if you need help securing funding for your company, meet with us, your Family Business Lawyer™ to discuss your options. 

Owners of C-corporations and S-corporations, aptly known as shareholders, can sell shares of stock in their company to outside investors. By purchasing shares of a company’s stock, investors offer financing in exchange for a share in the percentage of your company’s profits. Shareholders may also be granted voting rights, which gives them a role in decisions on key issues, such as membership and positions on your board of directors, management decisions, and other corporate actions.

C-corporations can have an unlimited number of shareholders, and can issue different types, or classes, of stock. In contrast, S-corporations can have no more than 100 shareholders and are only allowed to issue a single class of stock. Given these restrictions, C-corporations are the most attractive entity for equity investors. However, as we mentioned earlier, due to the expense and complexity required to set up and maintain, very few small- and mid-sized companies are set up as C-corporations.

Whether you are an S-corporation or C-corporation, if you plan to issue shares of stock in your company, you will definitely need the support of an experienced business lawyer. Ideally, you’ll want to work with us, your local Family Business Lawyer™, who has worked with companies that have raised venture capital before and done so in your specific industry.

Get Professional Assistance

Properly selecting, setting up, and maintaining your business entity is far too important for you to try to handle everything on your own. As your Family Business Lawyer™, we will offer you trusted advice on choosing the entity that is best suited for your particular business, while also helping to ensure that your entity is properly set up, with all of the necessary agreements and other resources in place.

Additionally, we can provide you with a variety of business systems, which will not only make your operation more efficient, but also establish a clear separation between your business and personal finances, which is a vital part of maintaining your entity’s liability protection. Finally, as your Family Business Lawyer™, we will also make sure that you are in full compliance with the various state laws and administrative formalities required to maintain your entity and safeguard your personal assets.

With all of these tedious—yet critically important—matters taken care of, you can devote all of your energy and passion into growing your business into something truly meaningful for yourself, your clients, and your family. Contact us today to get started.

This article is a service of Liz Smith, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule your appointment at 907-312-5436, or find a time for us to call you

Whether it’s to qualify for Medicaid, avoid probate, or reduce your tax burden, transferring ownership of your home to your adult child during your lifetime may seem like a smart move. But in nearly all cases, it’s actually a huge mistake, which can lead to dire consequences for everyone involved.

With this in mind, before you sign over the title to your family’s beloved homestead, consider the following potential risks.  

1. Your Eligibility For Medicaid Could Be Jeopardized

With the cost of long-term care skyrocketing, you may be worried about your (or your senior parents’) ability to pay for lengthy stays in an assisted-living facility or a nursing home. Such care can be extremely expensive, with the potential to overwhelm even those families with substantial wealth.

Since neither traditional health insurance nor Medicare will pay for long-term care, you may  look to Medicaid to help cover the costs of long-term care. To become eligible for Medicaid, however, you must first exhaust nearly every penny of your savings.

In light of this requirement, you may have heard that if you transfer your house to your adult children, you can avoid selling the home if you need to qualify for Medicaid. You may think transferring ownership of the house will help your eligibility for benefits, and this strategy may seem easier and less expensive than passing on your home (and other assets) through estate planning.

However, this tactic is a big mistake on several levels. It can not only delay—or even disqualify—your Medicaid eligibility, it can also lead to other serious problems. Here’s why: In February 2006, Congress passed the Deficit Reduction Act, which included a number of provisions aimed at reducing Medicaid abuse.

One of these provisions was a five-year “look-back” period for eligibility. This means that before you can qualify for Medicaid, your finances will be reviewed for any “uncompensated transfers” of your assets within the five years preceding your application. If such transfers are discovered, it can result in a penalty period that will delay your eligibility. Any transfers made beyond that five-year window will not be penalized.

The length of the penalty period is calculated by dividing the amount of the uncompensated transfer by the average cost of one month of private nursing home care in the state you live in. These days, the average cost of nursing home care is roughly $10,000 a month. Given these figures, this means that for every $10,000 worth of uncompensated transfers made within the five-year window, your Medicaid benefits will be delayed for one month. So if you transferred the title to a home worth $500,000 within the look-back period, your Medicaid benefits would be delayed for 50 months. 

In light of this, if you transfer your house to your children and then need long-term care within five years, it could significantly delay your qualification for Medicaid benefits—and possibly even prevent you from ever qualifying. Rather than taking such a risk, consult with us, your Personal Family Lawyer® to discuss safer and more efficient options to help cover the rising cost of long-term care, such as purchasing long-term care insurance.

2. Your Child Could Be Stuck With A Massive Tax Bill

Another drawback to transferring ownership of your home in this way is the potential tax liability for your child. If you’re elderly, you’ve probably owned your house for a long time, and its value has dramatically increased, leading you to believe that by transferring your home to your child, he or she can make a windfall by selling it. And by transferring the property before you die, you may think that you can save your child both time and money by avoiding the need for probate.

Probate is the court process used to distribute your assets according to the wishes outlined in your will or according to our state’s intestate succession laws if you don’t have a will. Depending on the complexity of your estate, probate can be a long and expensive process for your loved ones; however, that expense is likely to be relatively minor compared to the tax bill your heirs could face.

That’s because if you transfer your home to your child during your lifetime, he or she will have to pay capital gains tax on the difference between your home’s value when you purchased it and the home’s selling price at the time it’s sold by your child. Depending on your home’s value, that tax bill can be astronomical.

In contrast, by transferring your home at the time of your death via your estate plan, your child will receive what’s known as a “step-up in basis.” This tax savings is one of the only benefits of death, and it allows your child to pay capital gains taxes when he or she sells your home, based only on the difference between the value of the home at the time of inheritance and its sales price, rather than paying taxes based on the home’s value at the time you bought it.

For example, say you originally purchased your home for $80,000, and when you die, the home had appreciated in value to $250,000. Your daughter inherits the home upon your death, and then she sells it five years later for $300,000. With the step-up in basis in effect, she would only owe capital gains taxes on the $50,000 of difference between the home’s value when it was inherited and when it was sold.

However, if you transferred ownership of the home to her while you were still living, your daughter would lose the step-up in basis, and would face a capital gains tax bill of $220,000.

Capital gains tax is only one kind of tax that could be impacted by a transfer of your home during your lifetime. You may also destroy valuable property tax basis, which could cause a re-assessment of your home for property tax purposes, depending on the county or state your home is located in. 

There are much better ways to avoid probate using estate planning, such as by putting your home into a revocable living trust, in which case your home would immediately pass to your loved ones upon your death, without the need for any court intervention. As your Personal Family Lawyer®, we can help you choose the most advantageous estate planning strategies to minimize your beneficiaries’ tax liability and ensure they get the most out of their inheritance, all while allowing them to avoid court and conflict.

3. Your Home Could Be Vulnerable To Debt, Divorce, Disability, & Death

There are a number of other reasons why transferring ownership of your house to your child is a bad idea. If your child takes ownership of your home and has significant debt, for example, his or her creditors can make claims against the property to recoup what they’re owed, potentially forcing your child to sell the home to pay those debts.

Divorce is another potentially thorny issue. If your child goes through a divorce while the house is in his or her name, the home may be considered marital property. Depending on the outcome of the divorce, the settlement decree may force your child to sell the home or pay his or her ex spouse a share of the home’s value.

The disability or death of your child can also lead to trouble. If your child becomes disabled and seeks Medicaid or other government benefits, having the home in his or her name could compromise their eligibility, just like it would your own. And if your child dies before you and owns the house, the property could be considered part of your child’s estate and end up being passed on to your child’s heirs, leaving you homeless.

There’s Simply No Substitute For Proper Estate Planning

Given these potential risks, transferring ownership of your home to your adult child as a means of “poor-man’s estate planning” is almost never a good idea. Instead, you should consult with us, as your Personal Family Lawyer®, to find alternative solutions. We can help you find much better ways to qualify for Medicaid and other benefits to offset the hefty price tag of long-term care, and at the same time, we will keep your family out of court and conflict in the event of your death or incapacity.

As your Personal Family Lawyer®, we offer a variety of different estate planning packages at a variety of different price points as part of our Life & Legacy Planning Process. With our guidance and support, we will not only help you protect and pass on your home, but all of your family’s wealth and assets, while also enabling you to better afford whatever long-term healthcare services you might require. Contact us today to learn more.

This article is a service of Liz Smith, Personal Family Lawyer® in Juneau, Alaska. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Life & Legacy Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today at 907-312-5436 to schedule a Life & Legacy Planning Session and mention this article to find out how to get this $750 session at no charge; or book a time for our team to call you at a time you choose.