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February 22, 2022 by Cava Faulkner

If you own a business, you almost certainly have intellectual property. However, because your intellectual property is intangible, it can be invisible to you and those who aren’t familiar with the nature of intellectual property and its value, so it often gets overlooked, especially when it comes to estate planning. Yet, if you fail to properly document your intellectual property, your estate plan will likely not protect it—and this could cause your loved ones to miss out on what can be among your most valuable assets.

When we talk about intellectual property, we’re referring to creations of the mind, including inventions, literary and artistic works, designs, logos, brand names, and images, all of which are used in the course of a business.

Even if you’ve worked with a lawyer to set up your business entity or a CPA to file your taxes, those advisors may not be thinking about or helping you plan for what happens to your intangible business assets upon your death. Similarly, most lawyers who focus on estate planning don’t really understand the value of intellectual property and how to protect it.

Along those same lines, when helping you set up your business structures, most business lawyers aren’t thinking about your incapacity or death. With this in mind, it’s vital that you understand enough to ensure that any intellectual property you own is documented, protected, and you’re working with a legal team that helps ensure the value of your intellectual property isn’t lost when you die.

Identifying, Valuing, and Protecting Your Intellectual Property

In today’s world, your intellectual property could be your most valuable asset.In fact, studies show that 80% of a typical company’s total value consists of intellectual propertyGiven this, we want to support you to make the invisible visible, enhance its value, protect it properly, and ensure your family receives the maximum value from your intellectual capital when you pass away.

Properly protecting your intellectual property, or IP, begins with identifying it and valuing it. Yet, even the biggest of today’s companies often fail in this regard. “Very few companies recognize the value of their IP, nor have they secured an IP strategy that mirrors their long-term corporate strategy in order to maximize this value, ” said Brian Hinman, Chief Innovation Officer at Aon, a leading global professional services firm.

And while you might think that identifying, protecting, and valuing your intellectual property is something that only applies to big companies, not small businesses like yours, that’s definitely not the case. Indeed, your intellectual property can be of even greater value to your loved ones once you’re no longer around and able to financially provide for them.

For all of these reasons, it’s imperative that you take the proper steps to not only protect these intangible assets during your lifetime, but that you also use estate planning to ensure that your intellectual property is properly handled following your death, so your loved ones can continue to get the most value out of these most valuable assets.

Documentation and Registration

The first step to take in protecting your intellectual property is to formally document it in your inventory of assets. When you create your asset inventory, be sure to not only list all business entities you own, but also consider that each business entity should maintain a record of its assets, including intangible assets like intellectual property.

The next step is to legally register trademarks, copyrights and patents with the U.S. Patent and Trademark Office, and ensure you have the proper legal agreements and contracts in place to ensure there’s no question about who owns these works. To this end, if you have not protected your intellectual property with copyrights, trademarks, patents, royalty and licensing agreements, non-competes for employees, and work-for-hire provisions in your existing agreements with independent contractors and vendors, now is the time to do so.

Don’t wait until your intellectual property gets stolen or you receive a cease-and-desist letter to put these protections in place. Registering a trademark or copyright might cost you time and money, but failing to register your brand can ultimately cost you far more than that in legal fees or the lost value of your assets, especially if you end up in court, trying to fight for what you thought you owned.

Address Your Intellectual Property in Your Estate Plan

In addition to protecting your intellectual property during your lifetime, you don’t want to put your loved ones in the position of losing those intangible assets in the event of your incapacity or death. To prevent your heirs from losing out on your most valuable assets, as well as ensuring they don’t get caught up in long, costly court battles over the ownership of your intangible assets, you should put in the time and energy to protect these assets now.

After you have documented your intellectual property, review the operating agreement or bylaws of your business entity. And if you don’t have an operating agreement or bylaws, now is the time to put these essential legal agreements in place. Read through your governing documents to see what they say about what happens to your business and its intellectual property upon your death or incapacity.

If you think this all sounds overly complicated, imagine how much more difficult it will be for your loved one’s to deal with it should something happen to you. In fact, it could prove impossible for your loved ones to handle these matters in your absence, which is why it’s so important for you and your legal team to take care of these issues now. That way, your family isn’t stuck trying to clean up your mess after your death.

To demonstrate just how lengthy, costly, and ugly court battles over intellectual property can be, read this account of the troublesAmerican writer John Steinbeck’s children and grandchildren had in dealing with the rights to his literary works following his death Even though the Nobel Prize-winning author died in 1968, his family members were still fighting over his intangible assets as recently as 2017, nearly half a century later.

Protect Your Intellectual Property For Future Generations

While you might not be a Steinbeck, you very well may have valuable intellectual property that has not been properly documented or addressed in your estate plan. If that’s the case, meet with us, as your Personal Family Lawyer®, right away to discuss how we can support you in documenting, valuing, and protecting these intangible assets, so your loved ones can benefit from these creations for generations to come.

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.

February 20, 2022 by Cava Faulkner

These days, you’ll find all sorts of advice about how best to launch a business. But with so much information out there, it’s hard to know what you should heed and what you can ignore. To make things simple, we’ve compiled a list of five fundamental tips for starting a business that you can’t afford to miss.

Solve a problem

One of the best ways to come up with a winning business idea is to design your product or service to solve a specific problem. By fixing a problem, you’ll have a solid customer base right out of the gate, who won’t need much selling provided your solution works.

If possible, create your business around a problem you’ve faced yourself, so you thoroughly understand and trust the value your company offers. If your business truly helps improve people’s lives, you’ll succeed.

Stop waiting and start doing

While it may seem counterintuitive, it’s often better to launch your business before you feel like your product is 100% perfect. Delaying your start is often an unconscious way of procrastinating—and besides, you’ll probably never feel like your business is totally perfect.

Best to launch fast before anyone else beats you to the market—or before you second-guess yourself out of launching at all. From there, you can adapt and perfect your solution with a small group of paying customers, whom you should give special attention in order to guarantee their happiness and loyalty. The most effective way to learn is to get your product into people’s hands or your service into people’s lives and see how they like it.

Remember, you should be prepared to fail, learn from your mistakes, and keep iterating!

Keep it simple

When you come up with a great business idea, it’s tempting to imagine all of the possibilities of where it might go, and try to add all of those things into your launch. But you should narrow your focus and costs by making your solution as effective as possible, without getting too elaborate or complicated.

Consider the minimum viable product, or MVP, often talked about in the tech sector. What’s the minimum you can offer and get the results you envision for the people you serve? Offer that first, and build upon it from there.

Once your company is up and running and you’ve got some income and customers, it will be much easier and affordable to add additional features.

Be passionate but self-aware

The most successful business ideas are ones that are near and dear to your heart. Focusing on something you’re passionate about will help keep you motivated to do whatever it takes to succeed.

However, just being passionate won’t guarantee success. It takes a certain mindset to endure the rigors of entrepreneurship, so unless you’re comfortable taking risks, learning from failure, and working harder than you ever have before, you might want to rethink things.

When things get challenging—and they definitely will—this mix of passion and fortitude will allow you to stay the course.

Know what it takes to LIFT your business right from the start

Starting a business involves setting up the correct legal, insurance, financial, and tax systems to support your goals and objectives.

You can begin with the MVP of legal, insurance, financial, and tax (LIFT) systems, but don’t go bare. At the very minimum, you need a legal entity (in the right state and of the right type), some basic agreements, and possibly a trademark. You also need basic insurance coverage, financial tracking and reporting systems, and tax planning.

You may be able to do some of this yourself, provided you’ve got the right guidance to make wise decisions. We offer exactly this kind of support with our LIFT Start-Up Sessions. Contact us to schedule one before starting your business—or if you’ve started a company but have yet to set up LIFT systems, or if you’re simply not sure they’ve been set up correctly.

We’ll make sure you’ve got the right LIFT foundation to support your vision and goals, so your startup has the best possible chances for both initial success and future growth.

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.

February 19, 2022 by Cava Faulkner

In the first part of this series, we discussed a couple of the most critical updates you must make to your estate plan if you’re getting divorced. Here, we’ll cover the last three of these must-do planning tasks.

Because getting divorced can be overwhelming on so many different levels, updating your estate plan often takes a back seat to other seemingly more-pressing priorities. But failing to update your plan for divorce can have potentially tragic consequences, some of which you may have never even considered before.

In fact, it’s critical that you update your plan not only after the divorce is final, but as soon as you know the split is inevitable. Until your divorce is final, your marriage is legally in full effect, so if you die or become incapacitated while the divorce is still ongoing and you haven’t updated your plan, your soon-to-be ex spouse could end up with complete control over your life and assets.

For example, if you suddenly die of a heart attack while the divorce is ongoing and never got around to changing your estate plan, it’s quite likely that your future ex would inherit everything. And if that’s not bad enough, if you were to become incapacitated in a car accident during the divorce, the very person you’re paying big money to legally remove from your life could be granted complete authority over all of your legal, financial, and healthcare decisions.

This is something your divorce attorney won’t think to bring up, but it’s literally one of the most critical matters you need to handle if you’re ending your marriage. Last week, we discussed the first two estate planning changes you must make—updating your power of attorney documents and beneficiary designations—and today we’ll share the remaining three.

3. Create a new will

You should create a new will as soon as you decide to get divorced, because once you file, you may not be able to change your will. Rethink how you want your assets divided upon your death. This most likely means naming new beneficiaries for any assets that you’d previously left to your future ex and his or her family. And unless it’s your wish, you’ll probably no longer want your ex—or any of his or her family—listed as your will’s executor or administrator, either.

Some states have community-property statutes that entitle your surviving spouse to a certain percentage of the marital estate upon your death, regardless of what’s in your will. This means if you die before the divorce is final, you probably won’t be able to entirely disinherit your surviving spouse through the new will.

However, it’s almost certain you wouldn’t want him or her to get everything. Given this, you should update your will as soon as possible once divorce is inevitable to ensure the proper individuals inherit the remaining percentage of your estate should you pass away while your divorce is still ongoing.

And should you choose not to create a new will during the divorce process, don’t assume that your old will is automatically revoked once the divorce is final. State laws vary widely in regards to how divorce affects a will. In some states, your will is revoked by default upon divorce. While in others, unless it’s officially revoked, your entire will—including all provisions benefiting your ex—remains valid even after the divorce is final.

In light of this uncertain legal landscape, it’s critical that you consult with us as soon as you know divorce is on the horizon. We can help you understand the law and how to best navigate it when creating your new will—whether you do so before or after your divorce is over.

4. Amend your current trust or create a new one

If you have a revocable trust set up, you’ll want to review and update it, too. Like wills, the laws governing if, when, and how you can alter a trust during a divorce can vary, so you should do it as soon as legally possible. In addition to reconsidering what assets your ex spouse should receive through the trust, you’ll probably want to replace him or her as a successor trustee if they are so designated.

And if you don’t have a trust in place, you should seriously consider creating one, especially if you have minor children. Trusts provide a wide range of powers and benefits unavailable through a will, and they’re particularly well-suited for blended families. Given the likelihood that both you and your spouse will eventually get remarried—and perhaps have more children—trusts are an invaluable way to protect and manage the assets you want your children to inherit.

By using a trust, for example, should you die or become incapacitated while your kids are minors, you can name someone of your choosing to serve as successor trustee to manage their money until they reach adulthood, making it impossible for your ex to meddle with their inheritance.

Beyond this key benefit, trusts afford you several other levels of enhanced protection and control not possible with a will. So you should at least discuss creating a trust with an experienced lawyer like us before ruling out the option entirely.

5. Revisit your plan once your divorce is final

During the divorce process, your main planning concern is limiting your soon-to-be ex’s control over your life and assets should you die or become incapacitated before divorce is final. Given this, the individuals to whom you grant power of attorney, name as trustee, designate to receive your 401k, or add to your estate plan in any other way while the divorce is ongoing are often just temporary.

Once the divorce is final and your marital property has been divided up, you should revisit all of your estate planning documents and update them accordingly based on your new asset profile and living situation. From there, your plan should continuously evolve along with your life circumstances, particularly following major life events, such as getting remarried, having additional children, and/or when close family members pass away.

Don’t wait; act now!

Even though divorce can be one of life’s most difficult transitions, it’s vital that you make the time to update your estate plan during this trying time. Meet with us to review your plan immediately upon realizing that divorce is unavoidable.

Putting off updating your plan, even for a few days, during a divorce can make it legally impossible to change certain parts of your plan, so take action now. And if you’ve yet to create any estate plan at all, an impending divorce is the perfect time to finally take care of this crucial task. Contact us today to get the process underway with a Family Wealth Planning Session.

February 18, 2022 by Cava Faulkner

Even if you put a totally solid estate plan in place, it can end up proving worthless if it’s not properly updated. Estate planning is not a one-and-done type of deal: It should continuously evolve along with your life circumstances.

No matter who you are, your life will inevitably change: families change, laws change, assets change, and goals change. In the absence of any major life events, we recommend reviewing your plan annually to make sure its terms are up to date.

Yet there are several common life events that require you to immediately update your plan—that is, if you want it to actually work and keep your loved ones out of court and out of conflict. To this end, if any of the following seven events occur, contact us right away.

1. You get married

Marriage not only changes your relationship status, it changes your legal status. Regardless of whether it’s your first marriage or fifth, you must take the proper steps to ensure your plan properly reflects your current wishes and needs.

After getting hitched, some of your most pressing concerns include: naming your new spouse as a beneficiary on your insurance policies and retirement accounts, granting him or her medical power of attorney and/or durable power of attorney (if that’s your wish), and adding him or her to your will and/or trust.

2. You get divorced

Since divorce can be so overwhelming, estate planning often gets overshadowed by the other dramatic new changes happening. But failing to update your plan for divorce can have devastating consequences.

Once divorce proceedings start, you’ll need to ensure your future ex is no longer eligible to receive any of your assets or make financial and medical decisions on your behalf—unless that’s your wish. Once the divorce is finalized and your property is divided, you’ll need to adjust your planning to match your new asset profile and living situation.

3. You give birth or adopt

Welcoming a new addition to your family can be a joyous occasion, but it also demands entirely new levels of planning and responsibility. At the top of your to-do list should be legally naming both long and short-term guardians for your child. Our Kids Protection Plan offers everything you need to complete this process for free right now.

Once you’ve named guardians, consider putting planning vehicles, such as trusts, in place for your kids. These documents can make certain the assets you want your child to inherit will be passed on in the most effective and beneficial way possible for everyone involved. Consult with us to learn which planning strategies are best suited for your family.

4. A loved one dies

The death of a family member, partner, or close friend can have major consequences for both your life and estate plan. If the person was included in your plan, you need to update it accordingly to fill any gaps his or her absence creates. From naming new beneficiaries, executors, and guardians to identifying new heirs to receive assets allocated to the deceased, make sure you address all voids the death creates as soon as possible.

5. You get seriously ill or injured

As with death, illness and injury are an unavoidable part of being human. If you’ve been diagnosed with a serious illness or are involved in a life-changing accident, you may want to review the people you’ve chosen to handle your healthcare decisions as well as how those decisions should be made. The person you want as your healthcare proxy can change with time, so be sure your plan reflects your current wishes.

6. You relocate to a new state

Since estate planning laws can vary widely from state to state, if you move to a different state, you’ll need to review and/or revise your plan to comply with your new home’s legal requirements. Some of these laws can be super complex, so consult with us to make sure your plan will still work exactly as you desire in your new location.

7. Your assets or liabilities change significantly

Whenever your estate’s value dramatically increases or decreases, you should revisit your plan to ensure it still offers the maximum protection and benefits for yourself and your loved ones. Whether you inherit a fortune, take out a new loan, close your business, or change your investment portfolio, your plan should be adjusted accordingly.

Count on us for guidance and support

You can count on us to ensure your estate plan is regularly reviewed and updated at all times. In fact, we have built-in processes to make sure this happens—be sure to ask us about them.

What’s more, rather than looking at the process as yet another task you have to accomplish, we view an annual review as a meaningful ritual that lets you see where your family has been and where you plan to go. But however you look at it, a regular review will put you at ease, knowing your family is protected and provided for no matter what happens.

February 15, 2022 by Cava Faulkner

If you or your parents have a retirement account, (or any investment accounts for that matter) now is the time to get connected to how those accounts are invested. While you may have outsourced all of this to a broker in the past, you can no longer afford to allow your investments to be made without your clear understanding of exactly what you are investing in, how and whether your investments align with your plans for the future.

My colleague shared a story that hit home with me, and it may for you as well.

After my colleague’s grandmother died, her grandmother’s retirement and investment accounts went directly to her mom, due to the estate planning they had set up. No court process. No intervention. No conflict. Great!

But my colleague’s mom then never looked at the investments in those accounts. She just let them stay as they were for four years, until finally, her daughters convinced her to look.

When they did look, they were mortified to find that, even though the investments should have been gaining with the bull market we’ve been in for the last many years, the accounts had actually decreased over the years from $100,000 to $60,000. If my colleague and her mom had looked at these accounts and re-allocated them when grandma died, this would not have been the case.

Fast forward to now, and the daughters think to look at mom’s retirement accounts with her, only to discover that mom has a 401k with $180,000 in it and it’s lost $17,000 over the last two weeks. Mom had picked her investments with the help of a friend many, many years before, and hadn’t looked at those investments since.

My colleague’s mom is mostly invested in high-growth ETFs, which may have been the right choice when she was building her retirement fund, but definitely is not the right choice given that she retires next year and will need to start making withdrawals to replace her income.

If mom doesn’t get her money into safer investments now, her daughters could end up needing to support her for the rest of her life.

So, why am I sharing this story with you?

Because now is the time for you to get connected to your investments, even if they are in a retirement account and invested through a broker or advisor. This is simply not the time to set it and forget it. It’s time to know what you have, and make intentional, aware choices about how your resources (and your parent’s resources) are being used.

Now is the time to truly understand what you have, and use it wisely.

Educate Yourself

If you or your parents have a retirement account, and you are not intimately connected to how your assets are being invested, it’s time to get more involved.

Log in to your retirement account or pull your last statement and look. Many brokerages select investment funds for their clients’ portfolios based on rates of growth. They’ll offer investment options based on a few tiers of growth and risk, and very often you have no idea what your assets are actually invested in.

Labels like “slow-growth” or “conservative” or “high-growth” or “income” aren’t enough to tell you exactly where your money is invested. So what you want to do now is look at your statement, which should contain the names of the funds chosen for you, and you can go from there to do your research. Look up each of the funds on sites like Yahoo Finance to see what you are investing in, and whether you understand these companies, believe in their future growth, and want to stay invested there.

If your investments are tied to an index, like the S&P, are you willing to keep betting on its growth? If not, now may be the time to make a shift. It’s possible that you have some losses right now, so you’ll have to decide if you want to lock in and limit those losses (and potentially trade some future gains even) to get more connected to what you are investing in now

Go through this process with your parents, too. The money they have invested in the stock market is part of your overall family wealth. If it’s not there to support them through their senior years, that financial responsibility will eventually fall to you. Having these conversations with them now can be difficult, but it’s important. And if you need help with this, please let us know, and we can support you as you raise these issues with them.

If you have a broker you work with, call them now, and ask to get on a video conference. Then, have them help you review each investment, why it’s been chosen, and whether there may be better or other options for you or your parents.

Here’s the key: make sure you understand it, and don’t hang up the phone until you do. If your broker is using words you don’t understand, or jargon, keep asking questions until you do understand.

If you need a referral to an advisor, or want us to sit down with you to help you look at what you have, give us a call.

With everything that is happening in the world—and with the volatility of the stock market and our current reality —knowing your options is vital to preserving the life and legacy your parents have worked to build. If you need help figuring out how to best preserve these assets, we are here and ready to support you.

February 14, 2022 by Cava Faulkner

If you’re struggling with debt, but don’t want to shut down your business, bankruptcy might be one way to save your company. While this may sound paradoxical, many big corporations – American Airlines, General Motors, and Kodak – have successfully used bankruptcy to restructure debt and get a fresh start.

The main difference between you and a big corporation filing bankruptcy is that if you use personal bankruptcy (either Chapter 7 or Chapter 13) to discharge or restructure your debt, it will impact your personal credit. In contrast, a Chapter 11 bankruptcy used by big corporations doesn’t hurt the credit of corporate officers or shareholders.

However, a few years of negative credit may be a valid option to give you another chance to rebuild your business. But deciding between Chapter 7 and Chapter 13, or whether to use bankruptcy at all (as opposed to negotiating directly with creditors), are big decisions—but ones we can help you evaluate.

How does Chapter 7 work?

Chapter 7 is a liquidation bankruptcy, which means all of your non-exempt assets (including your business assets) will be sold off by a court-appointed trustee to repay your creditors. This can let you wipe your personal debts clean and start over, albeit without credit available to you for some time.

And though your personal assets will be included in the bankruptcy estate, you can use exemptions to protect this property. In fact, if you don’t have a high income or significant assets, you might be able to use exemptions to protect all of what you do have using what’s known as a “no-assets case.” This is designed to ensure business owners have enough assets to sustain themselves while they get back on their feet.

How does Chapter 13 work?

Chapter 13 lets you keep your assets and repay some or all of your debts through a court-approved payment plan lasting three or five years. By filing Chapter 13, the court grants an “automatic stay” stopping ALL creditors from pursuing you. This temporarily halts repossession of your business and personal property, allowing you to potentially lower your payments—or at least give you time to catch up on those you’re behind on.

When it comes to secured debts, you can give up the collateral and convert the debt to an unsecured claim, or keep the property and continue to make payments through your repayment plan. What’s more, you typically pay only a portion of your unsecured debts, and the remainder is discharged (forgiven) at the end of the bankruptcy, provided you kept up with payments.

However, Chapter 13 requires that you pay off certain “priority” debts—back taxes, child support, and alimony—in full, regardless of your income.

Start with a clean slate

Both types of bankruptcy can improve your financial situation and let you re-focus on your business, without closing your doors. However, bankruptcy is not a panacea, and if you fail to meet your court-ordered obligations, you can face serious consequences. Given this, consult with us as your Family Business Lawyer® to see if either of these bankruptcy options (or negotiating directly with creditors) are right for you.

Does Your Estate Plan Protect Your Intellectual Property?