How to Create A Succession Plan for Business

How to Create A Succession Plan for Business

How to Create A Succession Plan for Business

A succession plan for business provides you with the tools you need to help ensure your business’s continued advancement, and the resourceful Texas succession planning attorneys at Ibekwe Law can help business owners ensure their financial and legal rights are protected.

If you own a business, you are likely working around the clock and may have put succession planning on the back burner. Much like your estate plan, however, your succession plan for business needs to be addressed prior to your need to implement it. Taking the time to address the matter sooner rather than later can bolster your ability to continue advancing your business while enhancing your peace of mind. If you are ready to learn more, do not hesitate to reach out and contact the dedicated Texas succession planning attorneys at Ibekwe Law, PLLC (512-505-2753).

What Is a Succession Plan for Business?

A succession plan for business refers to your strategy for moving leadership in your business – which can mean ownership of your business – forward when the time comes. That time may be when you (or your leadership team) step away to pursue new opportunities, retire, or pass away. Because the future is unpredictable and impossible to control, having a plan in place that addresses your wishes as they relate to your business’s succession is paramount.

Typically, succession planning – also called replacement planning – passes leadership on to either a group of current employees or to one specific employee, and it helps to ensure that your company will continue progressing smoothly forward after whatever precipitating event triggers the succession plan. Succession planning incorporates a cross-training component that allows employees who are positioned for potential leadership positions all of the following (well before a change in leadership is required):

  • An overarching, organic understanding of the business
  • The opportunity to develop a full range of relevant leadership skills
  • The ability to fully embrace the company culture

Developing a Succession Plan for Your Business

Succession planning for your business or company will not look exactly like the succession planning for any other business or company. At its core, a succession plan for business involves the following basics:

  • Evaluating the skills and assets in current leadership
  • Identifying those employees (and/or outside talent) who are potential leadership material
  • Implementing leadership training for those employees who are positioned for potential leadership roles
  • Reevaluating your succession planning efforts to address your company’s changing dynamic and needs
  • Having an emergency succession plan in place that is ready to go in the event that you or another key leader in your business unexpectedly requires replacement (in addition to your long-term plan)

Succession planning is not so much an event as it is a process that should evolve right along with your business.

Understanding Your Unique Business Needs for a Succession Plan

The succession plan for a mom-and-pop shop will vary considerably from the succession plan of a massive corporation. If you are running a small business on your own, your succession plan will likely focus on grooming a member of your family’s next generation – or a long-term employee whom you have mentored – to take over. If, on the other hand, you are the CEO of a large corporation, the board of directors is very likely to oversee the company’s succession planning with you, and there are also employees and shareholders to consider. Regardless of your business’s size, having a plan for inevitable (and perhaps unpredictable) future change is essential, and the visionary Texas succession planning attorneys at Ibekwe Law, PLLC can help.

Recruitment and Training

In the event that leadership in your business needs to do an about-face – whether this relates to you stepping down, to an emergency situation, or to a leadership shift – the best path forward involves avoiding mayhem and fostering a natural progression and evolution of leadership, which requires a succession plan for business that focuses on both recruiting and training potential leadership.

Recruiting Potential Leadership

Recruitment is all about incorporating proactive practices in your hiring protocols – with an eye toward enticing candidates who are a good fit for your company’s evolution and who are motivated to accept the challenges ahead. Sometimes, this means recruiting employees who are bursting with potential at the entry level, and sometimes, this means courting mid-level employees from outside your business who demonstrate the business savvy that you are looking for.

Training Potential Leadership

Regardless of how you acquire the employees whom you are grooming for potential leadership, the grooming process involves training. Your company does a specific kind of work and has a unique mission, culture, and trajectory, and leadership must be attuned to all of this. Training often focuses on ensuring that those rising through the leadership ranks have a close understanding of how every level of the business operates and of how these moving parts mesh.

Why Succession Planning Is Important to Your Business

If you own your own business and experience an emergency situation that requires you to step down in your leadership capacity, the empire that you have built for yourself (regardless of its size) could come to an abrupt halt if you do not have a solid succession plan in place. And if the business you lead is much larger, a sudden change in leadership can set off cascading negative consequences without the appropriate prior planning. With a well-considered succession plan for business in place, however, you can look forward to all of the following:

  • Increased motivation among your employees
  • Greater opportunities for mentorship and the smooth transfer of expertise within your business
  • A clearer focus on career development within your business
  • Greater understanding of your employees’ unique assets and value

Turn to an Experienced Texas Succession Planning Attorney for the Legal Guidance You Need

If you own or run a company, you need a tight succession plan for business in place, and the skilled succession planning attorneys at Ibekwe Law, PLLC in Texas are well positioned and well prepared to help. Your business is a tangible expression of your vision and hard work, and protecting this component of your legacy is well worth the effort. To learn more, please don’t hesitate to contact or call us at 512-505-2753 today.

When to Seek a Financial Power of Attorney in Texas

When to Seek a Financial Power of Attorney in Texas

When to Seek a Financial Power of Attorney in Texas

When you think about a financial power of attorney, you might think that it is something for rich, old, or ill people. While this can be true, there is a lot more to the matter of financial power of attorney. A power of attorney (POA) is actually a flexible legal contract that allows the person who creates the document to transfer financial power for a specific task, for multiple specific tasks, or into the future (in the event of his or her incapacitation). In other words, a financial POA can be for a one-time event, for every financial matter, or for anything in between. The POA itself is an incredibly versatile document, and if you are interested in exploring the matter of financial power of attorney in Texas further, contact the dedicated estate planning attorneys at Ibekwe Law, PLLC to learn more about how this legal document may help ensure your wishes are carried out.

Financial Power of Attorney: The Basics

Financial power of attorney might sound complicated –however, the basics are quite simple to understand. Consider the following:

  • A financial POA grants someone else the ability to make financial decisions on your behalf (within the parameters you set).
  • If you have a financial POA, you are its principal.
  • The person whom you assign to carry out financial duties on your behalf is known as the agent or the attorney-in-fact.

Do not let the legal terms frighten you away, your financial POA simply specifies whom you want to make financial decisions if the situation specified in the POA comes to pass.

Financial Peace of Mind

The most common reason for implementing a financial POA is to specify what should happen in the event of a medical emergency. If you are in the midst of the chaos of an emergency medical event, it is very likely that you will be incapable of attending to your regular financial needs, but the needs themselves will not disappear.

Your bills, mortgage, and financial accounts will remain active, and there will be payments and decisions that need to be made. You do not want a temporary setback to derail your financial future –and if the setback ends up being more than temporary –you do not want your family’s financial future to be derailed in the interim (while they tend to the grief associated with your incapacitation). When you have a financial POA in place that names a financially savvy agent whom you trust to manage your finances, it can provide you with the peace of mind you need to focus on recovering your health and well-being –without the nagging anxiety of tending to financial details.

How Your Financial Power of Attorney Works

Once your POA is executed (written, signed, and notarized), you will need to keep a copy in a safe place and provide your agent with the original. It is also a good idea to give a copy to everyone whom you want to know what your wishes are –your spouse and/or specific family members, for example. Your agent will present the financial POA to any third parties involved (your bank, for instance) when the time comes to exert his or her financial authority.

Powers of Attorney: Beginnings and Endings

Powers of attorney generally go into effect either immediately upon execution or upon some future event that is specified in the POA (often referred to as springing power of attorney –because of the way it springs into action when the precipitating event happens). The most commonly cited event that springs power of attorney into effect is if the principal becomes incapacitated, which means that one or more physicians certify that he or she is either mentally or physically incapable of making important financial decisions going forward. Common causes include:

  • Being in a coma
  • Suffering from debilitating dementia
  • Being unable to communicate

One’s POA automatically ends when the principal dies. Only a durable power of attorney extends beyond one’s incapacitation, which is why most financial powers of attorney are durable (unless they are specifically set up for making financial decisions in your absence –or in other discrete financial instances). The authority granted by a financial POA also ends in the following situations:

  • The principal revokes the authority granted.
  • A court invalidates the authority granted.
  • The agent is no longer able to do the job, and there is no alternative or successor agent assigned.
  • The agent and principal are spouses, and they divorce.

Authority Granted to Those with Financial Powers of Attorney

Those who have a financial power of attorney in Texas can be granted the authority to address all of the following matters:

  • Accessing your safe deposit box
  • Attending to your business operations, such as running your small business
  • Making gifts to charities or individuals in your name
  • Managing government benefits, including Medicare, Social Security, and unemployment compensation
  • Addressing any legal claims and litigation you are involved in
  • Attending to your tax matters
  • Managing your retirement accounts
  • Dealing with transactions that relate to banking and other financial institutions
  • Dealing with transactions that relate to estates, trusts, and other financial instruments with beneficiaries
  • Dealing with transactions that relate to insurance and annuities

The more complicated your financial situation, the greater your possible need for a financial power of attorney in Texas.

Learn More About the Creation of a Financial Power of Attorney in Texas

Having a well-considered financial power of attorney in place can provide you and your family with the peace of mind that comes from knowing you have taken the time and care necessary to help protect your finances into the future. The trusted estate planning attorneys at Ibekwe Law, PLLC in Texas are well prepared to help you execute a financial power of attorney that addresses your financial needs in the unlikely event that you become incapacitated. We are here to answer your questions and to help, so please do not hesitate to contact or call us at 512-505-2753 for more information today.

 

What Is A Digital Executor?

What Is A Digital Executor?

What Is A Digital Executor?

If you find yourself wondering what is a digital executor, it is probably a good time to consult with an experienced Texas estate planning attorney.

It is 2021, and when we die, we are very likely to leave behind a number of unattended digital happenings that can range from social media accounts to subscriptions and much more. Ultimately, these online entities may contain financial and other kinds of private information, and some of them are likely to involve an ongoing subscription rate. In other words, it is a good idea to deal with these loose ends when executing one’s estate, but it can be very difficult to do without assigning a digital executor. Learn more about what a digital executor is by contacting an experienced estate planning attorney at Ibekwe Law, PLLC in Texas a call at 512-505-2753 today.

Your Digital Executor

You obviously want your digital executor to know his or her way around the internet and to be capable of executing a number of important –and sometimes sensitive – tasks, which means he or she will need access to your suite of online information. Because the laws and online protocols for allowing digital executors access to decedent’s online accounts and subscriptions are evolving, it is important to provide your digital executive with a workaround in the form of a complete list of your online dealings –along with your usernames and passwords. This is a good way to help ensure that the execution of your digital estate proceeds smoothly rather than in fits and starts.

Your Digital Assets

Your digital estate likely consists of wide-ranging assets that can include all of the following:

  • Your email accounts
  • Your social media accounts, including Facebook, Instagram, TikTok, and Twitter
  • Your digital photo, video, and music archives
  • Your online banking accounts and other online financial tools
  • Your frequent flyer programs and other online reward accounts
  • Your online bill paying
  • Cryptocurrency accounts
  • Any blogs or websites you host
  • Your online dating accounts, which often have subscription charges associated

These represent the basics, but you may also have many others. Do not wait until it is too late to ask the question –what is a digital executor?– start thinking about organizing your digital assets today.

Addressing the Matter of a Digital Executor in Your Last Will and Testament

As mentioned, the laws regarding digital access are new –and somewhat wobbly at the moment– which means that addressing the matter of a digital executor in your Last Will and Testament (will) may or may not get the job done. Supplying the person you would like to take on this task with the exact information he or she needs can help you bypass this particular dilemma, but what if you would prefer that no one is allowed access to some or all of your private online accounts in the event you die before handling the matter? Many states are moving closer to allowing executors access to this private information –in a sort of blanket approach. If you seek greater privacy protections than this, it is a very good idea to discuss your concerns with one of the dedicated estate planning attorneys at Ibekwe Law, PLLC in Texas.

Leaving Specific Instructions

If you have specific requirements regarding your digital assets –or simply want them to be properly dispensed with when the time comes– the best thing you can do is to leave the person you have asked to be your digital executor with specific instructions that outline your requests. If you do have private information that you would like deleted sight unseen, include this request in your detailed list of instructions. It is important to point out, however, that you should choose your digital executor with care –making sure that you trust him or her to follow your instructions carefully. The fact is that some people simply cannot resist the allure of a secret (no matter how loyal and reliable they otherwise are).

Digital Accounts that Also Have a Brick-and-Mortar Component

Some accounts –even if you interact with them solely online– also have a non-digital component. Banks and insurance companies are a good example. While you may not have been inside a branch of your bank in a decade and may have purchased your insurance policy online –if it has a brick-and-mortar presence– the traditional executor of your estate will only be able to interact with these accounts and shut them down through the actual entity. In other words, he or she will not be granted online access. While your digital executor might be able to close the accounts, this is typically a job left to an estate’s traditional executor. Further, with privacy requirements skyrocketing for online activities –as witnessed by the identification codes that must be increasingly texted to our phones– there is no guarantee that your digital executor –armed with your usernames and passwords– will be able to accomplish the task.

By Way of Example

To better understand the importance of having a digital executor, let’s consider an example. Most of us have Facebook profiles and accounts. If you die with thousands of friends and a thriving account with many posts and pictures, what happens next? Some people like to keep these accounts active –allowing friends and loved ones to leave moving tributes in the account holder’s honor. There is, however, also a darker side to this. For one, Facebook will continue to process your account through its matching algorithms and will continue to recommend that people friend you post-mortem. Further, if no one has your Facebook login information, it could be a moot point. Your loved ones can contact Facebook, but the jury is still out on what Facebook is going to do about it.

Now Is a Good Time to Consult with an Experienced Texas Estate Planning Attorney

Tackling the question of what is a digital executor is an important task, and the trusted estate planning attorneys at Ibekwe Law, PLLC can help. Your digital assets are unique to you, and your digital-executor needs are similarly unique. Allow us to help you address your digital estate planning needs with confidence –balancing streamlined access with your privacy concerns. To learn more about how we can help you, please do not wait to contact or call us at 512-505-2753 today.

Tax And Estate Planning Attorney

Tax And Estate Planning Attorney

Tax And Estate Planning Attorney

Your estate plan is your legacy’s blueprint, and an experienced tax and estate planning attorney can help ensure that your legacy is well-executed and follows your wishes. Tax and estate planning attorneys are not just for the uber-wealthy or for massive international corporations. Tax planning and structuring are important for businesses of every size, and an experienced tax and estate planning attorney can help you make solid early decisions as well as help you forge a profitable path forward –whether your business is quite large, quite small, or somewhere in the middle. Further, your estate is your legacy, and being proactive when it comes to estate planning is the very best way to ensure that your legacy will flow smoothly to your loved ones (in the manner that you intend and when you intend) while minimizing the tax implications involved. The experienced Texas tax and estate planning attorneys at Ibekwe Law, PLLC (512-505-2753) have the legal insight and skill to help ensure that you get your estate plan right.

Your Estate Plan: The Basics

If you do not have an estate plan in place, the State of Texas will provide you with one –and will decide how your assets will be distributed. In other words, you will not be able to direct how your family members are provided for once you are gone, and it is highly unlikely that the state’s plans for your estate will coincide with your own. Further, without an estate plan, your estate is nearly guaranteed increased vulnerability to heightened taxation.

You are a unique individual with a unique estate that reflects your lifetime of effort and achievement, and no template from the internet can fully address your unique estate planning needs. Estate planning is an exceptionally complex and nuanced subsection of the law, and creating an estate plan with a trusted tax and estate planning attorney can provide you with the kind of peace of mind you are unlikely to achieve with a DIY weekend will-writing project. Protect your estate and your loved one’s futures by crafting the right estate plan for you –with professional legal counsel on your side. Some of the types of estate planning documents that may impact our legacy can include the following:

Last Will and Testament

Your Last Will and Testament (will) serves as your instructions to the court regarding how your assets will be distributed upon your death and also appoints the personal representative (executor) who will administer your estate plan. Probate is the process by which your estate is settled through the court (as guided by your will).

Living Trust

Your living trust directs how your assets should be managed in the event that you are unable to manage them yourself. In it, you will appoint a trustee who will manage your assets in accordance with your detailed instructions. Your trust is a private document –and if all of your assets are retitled into it– and it can allow you to bypass the probate process entirely.

Durable Financial Power of Attorney

Your durable financial power of attorney determines who will make financial decisions on your behalf in the event that you are unable to do so for any reason. Durable here means that the power you grant to the person making your financial decisions will survive your incapacitation (which is when you are most likely to need someone with the financial power of attorney to act on your behalf).

Advance Healthcare Directive

Your advance healthcare directive –also called a medical power of attorney– determines who will make important healthcare and personal decisions on your behalf in the event that you are unable to do so for yourself.

Your Estate Plan and Taxation

Taxation and your estate irrevocably dovetail together, and a strategic approach to taxation is foundational to every well-considered estate plan. The dedicated tax and estate planning attorneys at Ibekwe Law, PLLC in Texas tackle the complicated task of preserving your wealth and estate through effective and efficient tax strategies that focus on helping you navigate the labyrinth of state and federal tax laws; helping you implement sophisticated mechanisms for transferring assets; and helping you carefully manage the estate, gift, and income tax component.

Your Estate Administration

While having a well-crafted estate plan is critical to your peace of mind and to your family’s continued prosperity, there is also the administration of your estate to consider. When the time to execute your estate plan comes, an experienced tax and estate planning attorney will work in close tandem with the administrators, executors, guardians, and trustees involved in order to help them carry out your wishes in accordance with federal and state laws. Properly distributing estate assets –while helping to ensure tax efficiency– through the channels of probate proceedings or trust administration is key. And because there is also the hurdle of the final income tax return and preparation of the estate tax return to clear, it is in your best interest to consider reaching out to a tax and estate planning attorney.

Taxation: Planning and Structuring

For businesses large and small, corporations, and individuals with considerable wealth, tax planning and structuring is key to maximizing growth potential while ensuring ongoing stability. An experienced Texas tax and estate planning attorney can help you with all of the following complex tax-related endeavors:

  • Forming and structuring or restructuring your corporation, partnership, limited liability company, or any other form of enterprise
  • Crafting plans for executive compensation and stock options
  • Honing careful systems for taxed and tax-free mergers, acquisitions, and spin-offs
  • Guiding real estate investments, development, sales, and like-kind exchanges
  • Managing tax credit transactions
  • Guiding international efforts, including transactions, operations, and transfer pricing

Tax Controversies

Taxes are a fact of life, and tax controversies arise. Once you face such a controversy, moving forward without a dedicated tax and estate planning attorney can prove challenging. From assisting you through an audit to preparing your protest negotiations with the Texas Comptroller, the IRS Office of Appeals, or any other administrative appeals venue, your attorney can help to ensure that your rights and financial goals are well protected throughout. If your case proceeds to litigation, your well-informed and well-prepared tax and estate planning attorney will be at your side skillfully advocating for your case’s most favorable resolution.

An Experienced Texas Tax and Estate Planning Attorney Can Help

If you have tax structuring and/or estate planning concerns, the practiced tax and estate planning attorneys at Ibekwe Law, PLLC in Texas understand the gravity of your concerns and have the experience, legal insight, and strength of purpose to help you find the right answers for you. Your legacy matters, so please do not wait to reach out by contacting us on our website or calling us at 512-505-2753 today.

Intergenerational Wealth for Women Using Estate Planning

Intergenerational Wealth for Women Using Estate Planning

Intergenerational Wealth for Women Using Estate Planning

Intergenerational wealth speaks to the mark your extended family makes on your community, and careful estate planning can help you maximize this impact for generations to come. Intergenerational wealth and estate planning are both terms that sound pretty complicated. What is more, they probably sound like something that does not pertain to you. However, intergenerational wealth is just an elegant term for how families help support each other across generations and lifetimes, and estate planning is an especially grand term for financial planning throughout one’s own life and for how your assets will pass to your children and grandchildren.

The fact is that, if you are an adult woman –especially if you are a single mother– intergenerational wealth and estate planning is especially relevant to you. While addressing these concepts from the outside looking in can be overwhelming, once you have dipped your toe in the waters of financial planning, you will soon find your way, and the savvy financial planning attorneys at Ibekwe Law, PLLC in Texas at 512-505-2753 can help you with that.

A Wealth Transfer Is Emerging

The manifest destiny of baby boomers is emerging, and it amounts to an immense transfer of wealth. It is important to note that women stand to play an outsized role in this transfer. Further, women are increasingly building their own wealth –outside of the partnership of marriage. As this seismic shift progresses, financial advisors and estate planning attorneys –most of whom are men– need to keep up. If you are not receiving financial guidance that reflects your unique life –and life’s inevitable modern twists– it is a good idea to find a more enlightened estate planning attorney.

What It Means to Us as Women

As women, we wear a wide variety of important hats in our families, our homes, our jobs, and our communities. Further, all of the following apply:

  • Women, on average, earn less than men working in the same positions.
  • Women tend to shoulder greater responsibility regarding their homes and children.
  • Women are more likely to shoulder the responsibility of caring for aging parents and relatives.
  • Women, on average, live longer than men, which means we are more likely to be directly impacted by the result of estate plans.

Many of these resonate more profoundly with single mothers who shoulder even more significant responsibilities.

What is Intergenerational Wealth Planning?

Intergenerational wealth planning takes a more holistic approach to estate planning, which encompasses the greater goals of the entire family –now and into the future. As such, intergenerational wealth planning can address all of the following:

  • Distributing your assets according to your goals, wishes, and time guidelines
  • Helping family members better understand their financial planning options and opportunities
  • Investigating the gifting of wealth during one’s lifetime –and exploring the attendant pros and cons
  • Exploring the advantage of setting up trusts for one’s heirs
  • Exploring charitable giving
  • Reducing one’s estate taxes and the frustration and expense of probate

Ultimately, these combine to form the framework of your family’s intergenerational estate planning, which helps support your family’s greater good –in contrast to passing one person or one couple’s wealth on to specific beneficiaries. Intergenerational wealth planning truly takes the family’s heritage into consideration. Because women tend to predicate their life and financial goals on family, loved ones, and relationships, intergenerational wealth planning can be especially resonant for single mothers and other female heads of household.

Supporting Your Family over Many Generations

Single mothers take on immense responsibilities, and they often feel the tug of future and older generations even more profoundly. Your children depend upon you alone, and the estate you are building now will also contribute to and help guide the future of your children’s children. As a single mother, you are likely also motivated to play the legacy that your grandparents and parents built for you forward. All of this speaks to exactly what intergenerational wealth is about and to exactly how important intergenerational wealth planning is to your financial future.

Looking to the Future

If you are a single mother or married with children, you no doubt have serious concerns about supporting your children into their futures –in the context of your unique family, your extended family, and your community. Fortunately, intergenerational wealth planning has much to offer, including:

  • Allowing you to engage in financial planning that addresses your children and, in turn, their children
  • Allowing you to effect a financial plan that helps secure your family’s ongoing financial future
  • Allowing your family to become familiar with the financial goals and aspirations that make up your estate plan (without sharing your finances before you are ready to do so)
  • Sharing your financial values and guiding philosophies (related to earnings, investing, and savings) with your loved ones in a manner that brings you closer (rather than causing a rift)

As a single mother or a mother that is married, you have different needs to keep your intergenerational financial torch lit, but the resourceful estate planning attorneys at Ibekwe Law, PLLC in Texas have the dedication and financial insight to help you no matter what your financial goal are.

Starting Intergenerational Conversations Between Women

The fact is that a family’s estate is often passed between women in the end. Women tend to outlive men, which means they are more likely to ultimately direct the flow of estate plans. Addressing this fact is important, and a valuable mechanism for doing so is starting an intergenerational conversation between the women in your family. Traditionally, women are the gatekeepers of our families’ legacies (both financial and social), and keeping the channels of communication open between yourselves can help you chart a path forward that encompasses the values passed down through the generations –as tempered by new additions along the way.

Explore Intergenerational Wealth and Estate Planning with an Experienced Texas Estate Planning Attorney Today

Intergenerational wealth and estate planning need not be a daunting topic. The experienced Texas estate planning attorneys at Ibekwe Law, PLLC bring their enthusiasm for crafting well-considered estate plans that uphold each client’s unique intergenerational-wealth goals to every client we serve, and we are here for you, too. Take the first step toward financial peace of mind by calling us at 512-505-2753.

Entrepreneurial Wealth and Asset Protection

Entrepreneurial Wealth and Asset Protection

Entrepreneurial Wealth and Asset Protection

If you are one of the many busy women making your financial mark on the world, you need professional entrepreneurial wealth and asset protection on your side. Women, on average, earn less than men in the same professions, but this does little to stop us from holding our own when it comes to building our empires as an entrepreneur. The flip side of entrepreneurial wealth, however, is asset protection, and for women, there is a lot to consider. Married female entrepreneurs –especially if they have children– face even more significant hurdles regarding protecting the wealth they have to work harder to amass. Fortunately, the insightful Texas estate planning attorneys at Ibekwe Law, PLLC are committed to employing the full force of our experience and skill to help you better address your entrepreneurial wealth and asset protection.

Best Practices Regarding Asset Protection

Having that entrepreneurial spirit means taking risks, but it also opens you up to immense opportunities that extend beyond the merely financial. As entrepreneurs, women face more considerable roadblocks, which makes adhering to the following best practices paramount:

  • Keep your personal assets separate and protected from your business dealings by establishing a corporation or another form of limited liability enterprise.
  • Keep separate businesses separate. Taking the time to structure each business as a separate entity builds in protections.
  • Purchase business and personal insurance that is sufficient for the job at hand and that evolves along with your personal and business insurance needs.
  • Avoid personal guarantees with vendors. Even negotiating higher terms is often preferable to opening your personal finances up to greater vulnerability (entrepreneurship is all about balancing risk against the generation of revenue, and personal financial vulnerability is rarely worth the risk).
  • Consider transferring some of your assets to a trust that allows a third party (your trustee) to manage assets that benefit an assigned beneficiary. This can be an important tool for avoiding liability and legal obligations.

This may seem like a lot, and it is complicated. Working closely with an experienced estate planning attorney at Ibekwe Law, PLLC from the outset can help ensure that you begin as you mean to go on and that your assets are well protected all along your entrepreneurial journey and beyond.

Special Considerations for Married Women

Married women have special concerns when it comes to entrepreneurial wealth and asset protection. Because divorce happens and because couples are almost as likely to divorce as they are to stay together, female entrepreneurs must tread lightly. Every divorce is difficult and complicated, and divorces involving businesses and high assets are that much more so. If you happen to be an entrepreneur who owns more than one business, you have your work cut out for you.

Business Ownership

If you brought your business into your marriage with you –and kept it separate throughout– it remains your separate property that will not be divided upon divorce. The fact is, however, that it is very common for business and family finances to intermingle over the course of a marriage. A prime example is when you invest marital funds in your business. Further, even if you have managed to keep your business utterly separate from your marital financials, any increase in the value of your business since your marriage will likely be considered marital property– to be divided equitably between the two of you in the event of divorce.

Motherhood

As women, we tend to do it all, and this is even more true of mothers. Not only are you an entrepreneur, but you are also more likely to take on primary responsibility for raising your children. If you are facing a divorce, this can play another significant role. Texas courts are motivated by the best interests of the involved children in matters related to child custody, and this often means preserving the status quo.

While this can be to your advantage regarding your parenting plan, it can actually work against your entrepreneurial endeavors. If the court determines that you will remain the primary custodial parent, it can sway how it divides your marital assets (especially if your business is considered a marital asset). In a worst-case scenario, if the court determines your soon-to-be ex-spouse is better positioned to continue running your business, it could even award said business (or a significant portion of it) to your divorcing spouse (leaving you with the equivalent in other assets). In other words, it is exceedingly complicated, and you should consider contacting an estate planning attorney either during or immediately after the divorce process.

Protecting Your Wealth

As a married woman, there are important factors you should carefully consider regarding your entrepreneurial wealth and asset protection, including the following:

  • Consider carefully if you want to borrow from your family’s coffers to finance your business. The less you mix and mingle funds, the more likely you will be able to maintain your business’s status of separate property.
  • Pay yourself a fair salary. If you throw yourself into growing your business but fail to adequately pay yourself, it can be interpreted as a drain on your family’s finances and can increase the likelihood that your business will be considered marital property. The idea behind this is that while your spouse supported your family, you worked to build your business.
  • The more involved your spouse is in your business –and the longer the involvement– the more likely the court is to determine that your spouse should profit from your business’s growth.
  • Remember that, upon divorce, the court will divide your marital assets in a manner deemed fair given the circumstances. Your goal is to keep your business wholly your one, which means you should be open to sacrificing other assets in order to reach an agreement. In other words, it is better to give up other assets, such as equity in your home or a percentage of your financial portfolio, than to submit to the division of your business, which can spell the beginning of the end.

Address Your Entrepreneurial Wealth and Asset Protection With A Savvy Texas Estate Planning Attorney Today

Your entrepreneurial wealth is worth protecting, but as a woman, you face unique obstacles. The dedicated Texas estate planning attorneys at Ibekwe Law, PLLC are in the business of empowering female entrepreneurs and of helping you protect your assets as you build your unique empire. To learn more about how our resourceful legal team can help you, please do not wait to contact or call us at 512-505-2753 today.