Latest News

As the host of the wildly popular The Joy of Painting TV series on PBS, Bob Ross became a pop-culture icon, who was equally famous for his giant head of hair, soothing baritone voice, and folksy demeanor as he was for his iconic landscape paintings. And like so many other artists, Bob’s artwork and image would become even more popular following Bob’s death in 1995.

Bob’s philosophy in both painting and life was that there “were no mistakes in life… just happy little accidents.” Sadly, as detailed in the recent Netflix documentary Bob Ross: Happy Accidents, Betrayal & Greed, Bob’s failure to coordinate his business agreements with his estate plan was anything but happy, leaving his only son largely unable to benefit from his father’s fame and fortune.

Bob’s planning failures led to an ugly court battle between his former business partners and his family, who were fighting for control of the lucrative intellectual property rights to the Bob Ross brand. And while Bob’s son Steve ultimately lost his fight to benefit from the business empire built on his father’s persona and painting skills, here in part two, we’ll explain the steps you can take to ensure that your loved ones don’t suffer the same fate and are able to fully benefit from all of your business assets following your death.

As we learned last week, although Bob intended to leave all of his intellectual property rights to his son, Steve, and half-brother, Jimmie Cox, and he even changed his estate plan to transfer those rights to them, the court ruled that Bob couldn’t transfer those rights because Bob didn’t own those rights to begin with. The court ruled that Bob had transferred all rights to his intellectual property to Bob Ross Inc. (BRI) during his lifetime via oral contracts, and therefore it didn’t matter what his estate plan said, because those rights weren’t Bob’s to give away.

Bob started BRI in 1985, with his wife Jane Ross, along with husband and wife Walter and Annette Kowalski. The four were initially equal partners in the corporation, but following Jane’s death in 1992, the bylaws of BRI required that Jane’s share in the company be divided equally among the surviving three partners. As a result, Bob was reduced to owning just one-third of the company that bore his name and likeness, and this was the structure in place upon Bob’s death in 1995.

Bob’s situation is fairly common among business owners. When business owners first create their governing documents—operating agreements, bylaws, partnership agreements, etc.—they often aren’t thinking ahead about what would happen to their business and its assets when they die or if they become incapacitated. And because of this, they don’t take the proper precautions to ensure that their business assets are properly protected by their estate plan should something happen to them.

In other cases—and as we saw with Bob—business owners falsely assume that their estate plan will override any business agreements they are party to, and therefore any assets they pass to their loved ones via their will or trust will transfer to their intended beneficiaries regardless of what’s in their business agreements. However, this is false, and in fact, the very opposite is true. Whether it’s a partnership, LLC, corporation, or some other business structure, your estate plan does not have the power to modify, undo, or override any business agreements to which you are a party.

The bottom line: When it comes to the ownership of business assets, the legal agreements governing the ownership rights of a business are what determines who owns the business and its assets upon the death of an owner, regardless of what your estate plan says. This is why it’s essential that you make certain that any business agreements you enter into are in coordination with your estate plan. We can help you do this as long as we know about all of your business holdings, including your intellectual property and business entities when we handle your estate planning with you.

As we saw with Bob’s case, failing to properly coordinate your business agreements with your estate plan can lead to disastrous consequences. Fortunately, as your Personal Family Lawyer®, we can ensure that your business agreements are fully coordinated and integrated with your estate plan, so all of your business assets, including any intellectual property you own, will pass seamlessly to your loved ones in the event of your death or incapacity.

Whether your business is just getting started or you’ve been in business for years, here are the steps you need to take to avoid making the same not-so-happy mistakes that affected Bob Ross and his family.

The ideal time to coordinate your business agreements with your estate plan is when you first launch your business. This way you can address the ownership rights to all of your business assets, including any intellectual property, from the very start and incorporate those ownership rights into your company’s governing documents.

If your business has multiple owners, you’ll want to enter into the process of making agreements with your partners, and not just rely on form documents, or sign documents you have not fully understood. All too often, business agreements are created via form or template documents that do not give any real consideration to your most valuable assets. If that’s the case for you, now is not too late to make a change—but tomorrow might be.

Make certain that the governing documents address the ownership rights to all of the company’s assets, including any intellectual property, intentionally. And be sure to consider what happens to the company, and its assets, upon a sale, death, or disability of each owner of the company.

To ensure your intellectual property (and all of the assets of your business) are properly considered in your governing documents, you should consult with a trusted attorney like me, your Personal Family Lawyer®, who has experience in both intellectual property and estate planning (or can bring in the proper intellectual property advisors), to ensure that everything is documented and in alignment with your wishes, and your most valuable assets are properly handled.

If you are like Bob and many other business owners and you failed to coordinate your company’s governing documents with your estate plan at the start of your business, you’ll need to hire a lawyer like us to review your company’s existing governing documents to determine how the documents address the ownership and succession of the company’s assets. And if you haven’t created your company’s governing documents yet, now is the time to put these essential legal agreements in place.

When reviewing your governing documents, you’ll want to ensure that they properly address the ownership rights to your company’s intellectual property and other assets upon an owner’s death or incapacity, as well as upon the sale or dissolution of the business. If upon reviewing the governing documents, you find that the ownership rights are not in alignment with your estate planning goals, it may be possible to renegotiate the agreement with the other owners and amend the documents to better fit with your aims.

If renegotiating the ownership rights proves infeasible, at least your Personal Family Lawyer® will be aware of this fact, and we may be able to come up with an alternative solution to transfer ownership of these assets to your heirs. It’s certainly not the ideal situation, but it’s far better to learn this now while you are still alive, rather than learning it after your death as happened with Bob’s son Steve.

Once you’ve ensured the proper distribution of your intellectual property and other business assets through your company’s governing documents, you must then use your estate plan to protect and pass on the ownership rights to your share of the business interests you own. This often takes place through a coordinated business succession planning process.

Unfortunately, far too few business owners take the time to prepare for their company’s continued success following their retirement, death, or incapacity. Yet, creating a comprehensive succession plan as part of your overall estate plan is just as crucial as any other planning you do for your business, if not more so.

As we saw with Bob Ross, not planning for the future of your business after you are no longer in the picture can have terrible consequences for your family if (and when) something should happen to you. Whether you exit your business with a sale, your retirement, your incapacity, or as a result of your death, there will come a point when it’s time for you to exit your business. And a succession plan is designed to ensure that your company will continue to prosper once you are no longer running the show.

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

In fact, business strategies that worked for your grandfather and father might not have worked for you. And by the same token, what worked for you may not work for coming generations. This can make it feel impossible to even know where to begin with your plan, much less identify what problems might arise and how to address them. But start you must.

This is where experienced estate planning lawyers like us come in. We can guide and support you to create a comprehensive estate plan to ensure the company and wealth you’ve worked so hard to build will last for generations to come. In particular, this includes 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 wisdom and advice.

If you’ve yet to create an estate plan that includes a comprehensive succession plan for your business’s future, meet with your Personal Family Lawyer® right away to take care of this vital responsibility. And even if you already have a plan in place, you should have us review it to make certain you’ve covered all your bases, as this is one of the areas we see most often overlooked in estate planning. Taking these actions will not only help shield your company and family from unforeseen tragedy but also give you the peace of mind needed to take your business to the next level.

After you’ve decided how you want your business to be run in your absence and formally spelled this out in your succession plan, you may want to consider separating your operating activities and your intellectual property into separate entities. In that case, you’ll want to consider which estate planning vehicles are best suited for protecting and transferring the ownership of your intellectual property rights to your heirs. In most cases, the best planning vehicle for this purpose is going to be a trust, either a revocable living trust, an irrevocable trust, or a combination of the two.

Using a trust, you can spell out exactly how you’d like your intellectual property distributed to your beneficiaries. In addition to considering the best way to distribute your intellectual property to your beneficiaries, you’ll also want to consider which of your loved ones is best suited for owning and managing these intangible assets, as well as how you’d like those assets to be used for the benefit of your loved ones.

Intellectual property, such as trademarks, copyrights, and patents, can be leveraged to create revenue in a number of different ways. Your beneficiaries could simply sell your intellectual property assets outright, or they could use the intellectual property as collateral to take out a loan. Or they could decide to license the use of your intellectual property to others, which can generate an ongoing revenue stream that can last indefinitely. Indeed, as we saw with Bob Ross’s case when properly managed, the licensing fees for a company’s intellectual property can generate millions in revenue, and that income stream has the potential to continue for generations to come.

Don’t let what happened to Bob Ross’s family happen to yours. If you own a business, it’s absolutely crucial that you put in place an effective estate plan, including a comprehensive succession plan, to ensure that all of the wealth and assets you’ve worked so hard to build will be properly passed on to your loved ones in the event of your death or incapacity.

Furthermore, you must also ensure that your estate plan is properly coordinated with your business agreements, or your estate plan may not work as intended. And in that case, your loved ones may find themselves in the same situation as Bob’s son Steve, who was left with virtually nothing, while the business built on his father’s name and persona continues to bring in millions of dollars every year.

As your Personal Family Lawyer®, we know that your business is one of your family’s most precious assets, and with our support and guidance, we can ensure that it will continue to provide the maximum benefit for your loved ones following your death or incapacity. If you haven’t taken the time to put proper estate planning in place, consult with us, your Personal Family Lawyer® today, so we can help you find the estate planning strategies best suited for your asset profile and family dynamics.

And if you already have an estate plan—even one created by another lawyer—you should have us review your plan to ensure it will work as intended and that it’s properly coordinated with your business agreements. Contact us today to get started.

If you’re relying on your top line to grow your wealth, you could be missing out on easy opportunities to save money and improve profits, independent of your revenue.

Many entrepreneurs waste precious time and money by falling prey to these common mistakes. However, there is no need to sacrifice, work harder, or take on new financial risks when they can be easily avoided.

Discrepancies in your credit score can cost you thousands in interest rates and premiums. Monitor your credit report every six months for accuracy.

Differentiate between wasteful consumption expenses and rainmaking expenses that can pay big returns—you can’t afford to scrimp on those.

Commissioned advisors want to keep your assets under their control. Stay conscious of this bias. And, consider having us, as your objective trusted advisor who is not paid a commission, review all investments before you make them.

During tax season, your accountant’s focus is on filing returns, not strategizing. Meet off-season at least once to prepare a proactive—not reactive—tax strategy. And always get projections before the end of the year so you can strategize end of year tax decisions

Review your business structure with an attorney every three years to ensure your structure is still advantageous.

Refinancing or restructuring your loans could save interest and potentially even taxes. Pay off your least efficient loan first, and you could qualify for lower interest rates on the rest.

Invest in what you know. You—not a commissioned advisor—know what’s best for your business. And that requires you to be tracking your financials at least monthly, and likely weekly, to be making wise choices consistently.

Profit sharing with employees solely for tax purposes is like giving the IRS control of your money. Don’t spend money to save money. But, do invest money to create more of what you want. So, consider profit sharing to motivate long-term growth and legacy of your business.

Your contributions are tax-deferred, but you have to pay those taxes at some point. Because taxes are expected to go up, you’ll end up paying more to the IRS

Losing the passion, you have for your business means lost productivity—easy to do when you’re bogged down with daily details and decisions. Take the time to be proactive about your legal, insurance, financial, and tax planning so you can fuel the passion that brought you to this business in the first place.

If you’re ready to be proactive about the financial success of your business, begin by sitting down with us. We are here to help you implement legal, insurance, financial, and tax systems that will free up your time and money, so you can focus on what matters.

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, insurance, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

Within less than 10 years, cryptocurrency has evolved from a shadowy world ruled by high-risk speculation and dark-web devotees to one of the hottest trends in both investment and business. And the technology behind digital currency, known as blockchain, is itself experiencing booming popularity.

Indeed, blockchain is heralded by some as the most significant technological advancement since the launch of the internet. Outside of its use as a decentralized currency, blockchain tech is already gaining ground in a diverse array of industries, including supply-chain management, digital IDs, voting, real estate, journalism, and many others.

Whether or not any of those blockchain applications achieve mainstream success, one thing is certain—cryptocurrencies like Bitcoin have revolutionized business payment processing. What’s more, the applications that allow businesses to accept cryptocurrency have advanced to the point where it’s now just as easy—if not easier—to accept cryptocurrency as it is to accept credit cards.

Here we’ve outlined some of the biggest benefits businesses can achieve by adding crypto as a payment option. Given how fast and far digital currency has advanced, all business owners should give this new technology serious consideration.

When businesses process credit card payments, the transaction not only involves the merchant and credit card company, but multiple other intermediaries, all of which charge some type of fee. Given this, typical credit card processing fees for businesses average 3%, but can run as high as 5%.

With cryptocurrency, however, the payment is routed directly from the sender to the receiver, eliminating all middlemen and dramatically lowering fees. Indeed, cryptocurrency fees generally run between zero and 1%, so by offering it as a payment option you can save significant money on each sale.

Whether made at the point of sale (POS) or online, credit card payments are a goldmine for frauds and hackers. These criminals steal customer’s personal information and use it for all kinds of nefarious purposes. And since they often lack the security resources of larger companies, small businesses are one of their favorite targets.

When making cryptocurrency payments, customers aren’t required to share any personal data—the payments are totally anonymous—so there isn’t any identifying data for hackers to steal. What’s more, some people greatly value their privacy, so they use cryptocurrency over other payment options simply because there’s no way to identify the purchaser.

In fact, a recent study of online shopping by Statista found that 17% of consumers decided not to make on online purchase due to security concerns, and another 18% failed to make a purchase because the company required too much personal data in its security check.

As when paying with cash, crypto transactions are final and cannot be contested by a customer. So with cryptocurrency, customers can’t claim they didn’t authorize the payment or are unhappy with your product or service, which can eliminate a significant risk of doing business when customers buy something from you and then dispute the payment with their credit card company.

What’s more, the blockchain technology verifies that funds are available before the transaction is complete, making it nearly impossible for customers to make a purchase without the funds in their account to cover it. And unlike most credit card processing services, there are no holdbacks. When someone pays with cryptocurrency, you receive all of the funds right away.

The internet allows companies to do business with anyone in the world who has a web connection, so even the smallest business can now sell their goods and services—or purchase their supplies and equipment—internationally.

Because cryptocurrency is completely decentralized with no government regulating it, business owners can avoid the hassles and expense that come with foreign currency transaction fees and exchange rates. Rather than going through the headache of accepting dozens of different foreign currencies, businesses now have a single form of currency that is welcome no matter where you live.

Outside of new foreign customers, businesses can also attract consumers who are die-hard fans of cryptocurrency. Indeed, there are a growing number of people, who specifically seek out businesses that accept digital currencies, and you can break into this expanding customer base.

By adding this new payment option, you can also gain a serious advantage over your competitors that don’t accept crypto—and force them to play catch-up with you down the road. And with more and more brands, financial firms, and institutions accepting digital currency every day, it’s only a matter of time before this payment option will be the rule, rather than the exception.

Whether incorporated into your POS systems in a brick-and mortar storefront or added to your website’s e-store, getting your business set up to start accepting cryptocurrency is now quite simple and inexpensive.

In the past, you had to be an IT genius to understand and implement the new technology, but these days, even your neighborhood lemonade stand can start accepting digital currency simply by adding one of many apps available for smartphones.

In a coming article, we’ll spotlight some of the most popular methods small businesses can use to accept crypto payments, but until then, a simple Google search for “cryptocurrency payment applications” will give you a headstart in seeing what’s out there.

Like any new development involving a business’ finances and income, cryptocurrency comes with several legal, tax, and security issues. So if you’re serious about adding digital currency as a payment option, first consult with us as your Creative Business Lawyer® to ensure you have all of your bases covered—and can achieve these benefits without any unnecessary risk.

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.