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While estate planning is probably one of the last things your teenage kids are thinking about, given the dire threat coronavirus represents, when they turn 18, it should be their (and your) number-one priority. Here’s why: At 18, they become legal adults in the eyes of the law, so you no longer have the authority to make decisions regarding their healthcare, nor will you have access to their financial accounts if something happens to them.

With you no longer in charge, your young adult would be extremely vulnerable in the event they become incapacitated by COVID-19 or another malady and lose their ability to make decisions about their own medical care. Seeing that putting a plan in place could literally save their lives, if your kids are already 18 or about to hit that milestone, it’s crucial that you discuss and have them sign the following documents.

Medical power of attorney is an advance directive that allows your child to grant you (or someone else) the legal authority to make healthcare decisions on their behalf in the event they become incapacitated and are unable to make decisions for themselves.

For example, medical power of attorney would allow you to make decisions about your child’s medical treatment if he or she is in a car accident or is hospitalized with COVID-19.

Without medical power of attorney in place, if your child has a serious illness or injury that requires hospitalization and you need access to their medical records to make decisions about their treatment, you’d have to petition the court to become their legal guardian. While a parent is typically the court’s first choice for guardian, the guardianship process can be both slow and expensive.

And due to HIPAA laws, once your child becomes 18, no one—even parents—is legally authorized to access his or her medical records without prior written permission. But a properly drafted medical power of attorney will include a signed HIPAA authorization, so you can immediately access their medical records to make informed decisions about their healthcare.

While medical power of attorney allows you to make healthcare decisions on your child’s behalf during their incapacity, a living will is an advance directive that provides specific guidance about how your child’s medical decisions should be made, particularly at the end of life.

For example, a living will allows your child to let you know if and when they want life support removed should they ever require it. In addition to documenting how your child wants their medical care managed, a living will can also include instructions about who should be able to visit them in the hospital and even what kind of food they should be fed.

This is especially vital if your child has specific dietary preferences. For example, if he or she is a vegan, vegetarian, gluten-free, or takes specific supplements, these things should be noted in their living will. It’s also important if you don’t know all of their friends or who they would want to be part of their medical decision-making should they become unable to make decisions for themself.

Additionally, remember to speak with your child about the unique medical scenarios related to COVID-19, particularly in regards to intubation, ventilators, and experimental medications. How such treatment options can be addressed in a living will can be found in our previous post: COVID-19 Highlights Critical Need for Advance Healthcare Directives.

Should your child become incapacitated, you may also need the ability to access and manage their finances, and this requires your child to grant you durable financial power of attorney.

Durable financial power of attorney gives you the authority to manage their financial and legal matters, such as paying their tuition, applying for student loans, managing their bank accounts, and collecting government benefits. Without this document, you’ll have to petition the court for such authority.

As parents, it’s normal to experience anxiety as your child individuates and becomes an adult, and with the pandemic still raging, these fears have undoubtedly intensified. While you can’t totally prevent your child from an unforeseen illness or injury, with us as your Personal Family Lawyer®, you can at least rest assured that if your child ever does need your help, you’ll have the legal authority to provide it. Contact us today to get started.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

On October 15th, nearly two months after the death of Black Panther star Chadwick Boseman, his wife, Taylor Simone Ledward, filed documents with the Los Angeles court seeking to be named administrator of his estate. Earlier this year, Boseman and Ledward were married, and the marriage gives Ledward the right to any assets held in Boseman’s name at his death.

Boseman died at age 43 on August 28th following a four-year battle with colon cancer, and based on the court documents, it seems the young actor died without a will. While Boseman’s failure to create a will is surprising, he’s far from the first celebrity to do so. In fact, numerous big-name stars—Aretha Franklin, Prince, and Jimi Hedrix—all made the same mistake.

What makes Boseman’s story somewhat unique from the others is that it seems likely the young actor put some estate planning tools in place, but it’s possible he didn’t quite finish the job. Based on the number of hit films he starred in and how much he earned for those films, several sources have noted that Boseman’s assets at the time of his death should have been worth far more than the approximately $939,000 listed in court documents.

So what happened to the rest of Bosman’s wealth? Seeing that his death wasn’t a surprise, some commentators have suggested that the bulk of Boseman’s assets passed through private trusts. But if that’s the case, why didn’t he also have a will, which would almost always be created alongside trusts?

Last week in part one we discussed a few potential explanations for this apparent blind spot in Boseman’s estate plan, and how the young actor might have prevented the situation by creating a pour-over will to be used as a backup to any trusts he had put in place. Here in part two, we’ll focus on another critical component of Boseman’s estate plan—incapacity planning.

While it was critical for Boseman to create planning vehicles to ensure the proper distribution of his assets upon his death, that’s just part of the overall planning he needed. The young actor also needed to plan for his potential incapacity—and given that he had cancer, the need for comprehensive incapacity planning would have been exponentially vital.

Regardless of his age or health condition, Boseman, like all adults over 18 years old, should have three essential planning documents in place to protect against potential incapacity from illness or injury. These include a medical power of attorney, living will, and durable financial power of attorney.

Should you become incapacitated and unable to handle your own affairs, these planning tools would give the individuals of your choice the immediate authority to make your medical, financial, and legal decisions, without the need for court intervention. If prepared properly, these documents can even allow your family to engage in planning that would support your eligibility for government healthcare benefits support, if needed. Finally, such documents would also provide clear guidance about how your medical care and treatment should be carried out, particularly at end-of-life.

If you were to become incapacitated without such planning tools in place, your family would have to destitute your estate before you could claim governmental support for your medical care. Your loved ones would also have to petition the court to appoint a guardian or conservator to manage your affairs, which can be extremely costly, time consuming, and even traumatic. For an in-depth look at some of the consequences this can entail, read our previous post, The Real Cost To Your Family: Not Planning for Incapacity.

Seeing that Boseman was suffering from end-stage colon cancer, such planning tools for incapacity would have been an absolutely critical part of his plan. And while we don’t know for sure if he had such documents in place, given that he died peacefully at home surrounded by his friends and loved ones, it seems more than likely that he did.

As Boseman’s death illustrates, even superheroes need to plan for the future. Death and illness can strike any of us at any time. And regardless of how much money you have, you need a comprehensive estate plan in place, not only to protect and pass on your material assets to your loved ones when you die, but also to ensure you’ll be properly cared for in the event of your incapacity from illness or injury.

One of the primary reasons business owners set up corporations and limited liability companies (LLC) is to shield their personal assets from debts and other liabilities incurred by the business. Below, you’ll learn how your innocent mistakes will remove LLC protection.

Indeed, corporations and LLCs exist as separate legal entities from their owners, meaning the business itself can acquire assets, enter into contracts, and take on debt. In turn, if a corporate entity is unable to pay its debts, creditors are typically only allowed to go after the company’s assets, not the owners’ personal assets.

However, there are several circumstances whereby business owners can be held personally liable for corporate or LLC debts. Sometimes, business owners simply make innocent mistakes when running a business that leave them personally liable.

Other times, when business owners take certain actions, such as using the corporation to promote fraud, failing to observe corporate formalities, or even just inadvertently commingling corporate and personal assets, a court can hold the owners personally liable for the debts and liabilities of the corporate entity. When this happens, it’s known as “piercing the corporate veil.”

If you’re a business owner who’s thinking of incorporating, or if you already own a corporation or LLC, be aware of the following considerations, which can leave you personally on the hook for business debts.

If you cosign on a business loan or personally guarantee a financial obligation for the corporation or LLC, you share responsibility with the company for paying it back, and creditors can come after your personal assets if the business defaults on the loan.

Since many small business owners don’t have a lot of startup capital, you may be asked to use personal property, such as your home or other assets, as collateral on a business loan. If so, the personal property you pledged as collateral can be seized and sold off to pay your company’s creditors.

If you make fraudulent representations or omissions to secure a business loan for your company,  you can be held personally liable for those debts. What’s more, if your corporation or LLC was created to further a fraudulent purpose or you made business deals knowing the company wasn’t able to pay for them, you can be convicted of fraud, thereby voiding your personal liability protection.

As a small business owner, you may be tempted to commingle your personal finances with those of your company. It can be something as benign as using a company account to pay your mortgage or depositing a check made out to the company into your own account. In doing this, a court can decide that you’re using your company as an extension of yourself, and therefore you should be held personally liable for its debts.

When you’re working with us as your Creative Business Lawyer® on an ongoing basis, we regularly review your financials with you and ensure you’re keeping everything separate in the exact way you need to in order to protect your personal assets.

Corporations and LLCs are legally required to follow certain formalities and observe certain rules. If you fail to treat the business like a corporate entity by not observing these formalities—such as keeping detailed records (minutes) of meetings where important business decisions are made and adopting corporate bylaws—the court can rule your company is nothing but a shell and remove the veil of corporate protection covering your personal assets.

Indeed, maintaining corporate formalities is the single-most important aspect of keeping you safe from business creditors. When you’re working with us, we offer maintenance packages to help you with this and keep your personal assets safe.

Given all of the complexities surrounding corporations and LLCs, you should consult with us to make sure you’re not opening yourself up to be personally liable for your business debts. We can not only help you decide which business entity structure is best suited for your situation, we can also help you properly set up and maintain that entity, so your personal assets are protected.

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. Or, schedule online.

As a business owner, you’re likely monitoring a number of key performance indicators (KPI) to determine how well your company is doing. And if you’re launching a new business, you’ve undoubtedly heard about the importance of KPIs. Whether related to your financials, advertising, turnover, and/or website traffic, these metrics can be a great way to measure, maintain, and improve a business’ growth.

Yet there are a few metrics vital to a company’s long-term success that many business owners—especially first-timers—overlook or fail to track effectively. Ignoring these numbers can keep your company from achieving its full potential. Here are three such metrics you should keep a close eye on.

While most business owners are aware that employee satisfaction is important, most don’t realize just how critical it is. Indeed, some business experts rank employee happiness as the single-biggest driver of a company’s success.

This makes sense, seeing that happy employees are not only more productive, they also typically deliver better customer service, which can lead to increased sales and repeat business. On the flip side, unhappy employees can cause slow and/or lost sales, as well as decreased customer satisfaction.

What’s more, a satisfied team means less turnover, which can be uber costly in terms of recruiting, hiring, and training expenses. Given this, it can be useful to track both employee satisfaction and the costs of employee turnover. When employee satisfaction increases, your turnover costs should fall.

Start by making sure your employees are as content as possible, and most of the other stuff will usually fall into place on its own.

One frequently overlooked financial metric is your company’s cash conversion cycle (CCC), which tracks how quickly your customers pay you, compared to how long it takes you to pay your suppliers. According to Harvard Business Review, Amazon’s Jeff Bezos has mastered the CCC, which frees up loads of cash to invest as he pleases.

CCC is easy to calculate and a good measure of your cash flow:
1. First, determine the number of days of inventory you hold on average.

2. To that number, add the average number of days it takes for your customers to pay you.

3. Then, subtract the average number of days it takes for you to pay your suppliers.

The lower the number, the better. Back in 2013, Amazon had a record CCC of negative 30.6 days. However, getting your company’s CCC into the single digits is a fine target to shoot for. This often requires incredibly efficient inventory systems, flexible terms for your suppliers, and encouraging customers to use speedy payment options.

Set up a pet trust in your estate plan. It’s sad but true that many pets end up in shelters after their owner dies or becomes incapacitated. In fact, the Humane Society estimates that between 100,00 to 500,000 pets are placed in shelters each year for exactly this reason, and a large number of these animals are ultimately euthanized.

Whether we like it or not, the law considers pets to be nothing more than personal property just like cars, furniture, and electronic devices. In light of this cold reality, it’s vital that you provide for your pet’s future care through estate planning, so when you die or if you become incapacitated, your beloved friend won’t wind up in a shelter or worse.

The following tips offer helpful advice to ensure your faithful companion receives the best possible care when you’re no longer able to do it yourself.