An 8 Point Plan When Starting Your New Business

Starting a new business can seem overwhelming – especially when you’re doing it alone.

Creating a business plan will allow you to refine incomplete ideas, address areas you may have not yet considered, create a map so you know what to do next, and increase credibility for bank loans or investor funding.

While you may think you’ve got your business concept down pat, turning the idea you wrote down on a napkin into reality isn’t as easy as it might appear and many people get so caught up on how to start the process that the business itself never materializes.

Following this solid eight-point plan, based on guidelines from the U.S. Small Business Administration (SBA), will help you get down to business, literally:

  1. Executive Summary.

    The executive summary is a snapshot of your business plan as a whole and touches on your company profile and goals.

  2. Company Description.

    The company description provides information on what you do, what differentiates your business from others, and the markets your business serves.

  3. Market Analysis.

    Before launching your business, it is essential for you to research the industry, market, and competitors. What’s working and what’s not working for your competitors? How will you distinguish yourself?  Is there anyone else in your market?  If not, there may not be money to be made.

  4. Organization & Management.

    Every business is structured differently, so it’s important to understand how your company will be organized and managed. What entity will you use? Who’s in charge of what, when?  What kind of business succession plan needs to be put in place?

  5. Service or Product Line.

    Tell the story about your product or service. Describe what you sell and how it will benefit your potential customers.

  6. Marketing & Sales.

    Describe how you plan to market your business and explain your general sales strategy.

  7. Funding Request.

    If you are seeking funding for your business, make sure to include everything asked for in the plan. Any omissions may put your request at the bottom of the pile, or worse yet, in the garbage can.

  8. Financial Projections.

    Providing financial projections to back up your funding request is critical. Find out what information you need to include in your financial projections for the bank or angel investor.

It’s likely that you may not even know the answers to these questions.  That’s okay. We can help you to refine your goals, map out your plan, and provide the kinds of details needed to make your venture a success.

Are You Prepared to Include the “Wow” Factor?

You may think your business plan is great, but don’t forget that most people think the same of their own business.

The Wow Factor becomes especially important when you’re all competing for funding.

Make sure your plan has a “Wow” factor by:

  • Explaining in very clear terms why your business plan is unique;
  • Being clear about what you have to offer that’s different from your competitors (skills, experiences, relationships, etc.); and
  • Defining how your business caters to a unique niche in the market, which areas are being ignored and what potential opportunities exist for your business going forward.

The bottom line is that you want to make your business plan stand out far above the rest - your plan needs to be well thought out, organized, and unique.

Even if you don’t need outside funding, complete the business plan so you have a roadmap and the knowledge that you haven’t missed an important consideration.

Do You Know How An IRA Fits Into Your Estate Plan?

When you think of an IRA, you probably think of retirement. But what happens to your IRA money after you’re gone?

The answer depends on how you go about creating your estate plan and selecting beneficiaries.

You might be surprised to find out that your money could end up with the wrong people or cause an unexpected tax bill if you don’t plan ahead.

What your IRA means for your estate plan

Individual retirement accounts (IRAs) are often one of the most significant financial accounts you invest in throughout your lifetime.

When you’re working on your estate plan, you have to consider all your stuff like your IRA, your house, or your small business.

But unlike the way we may use some trusts for your family, IRAs have limited lifetime planning opportunities.

IRAs are subject to income tax (yes – even one you inherit), even though the estate tax or death tax only applies to large estates over $5.49 million.

Leaving your IRA to a spouse is a common choice, but you can’t assume that your IRA will automatically be distributed to your surviving spouse.

Your spouse must be explicitly named as its beneficiary through a proper beneficiary form.

Common IRA mistakes 

Mistake 1: Letting your IRA beneficiary forms become out of date after a divorce, the birth of a child or grandchild, or another major life event that would alter their choice of beneficiary.

Mistake 2: Naming your own estate as the beneficiary of your IRA. If you name a beneficiary such as your spouse or child, they’ll be in the position to make that money grow into even more wealth over time by using the so-called “stretch out” feature of these accounts.

If your own estate is the beneficiary, the money will be passed onto your loved ones in as little as five years (and possibly even faster), resulting in greatly accelerated (and often higher) taxation and a halt to the IRA’s potential growth over time. An unfortunate result all around.

If you decide to leave your IRA to your minor children, you can cause a less-than-ideal situation by forgetting to appoint a guardian to oversee the IRA until your kids are old enough to inherit the IRA.

Without a guardian, IRAs left to underage children can end up going to exes or other people you might not wish to share your wealth with.

Better than a guardian, you can create an IRA trust to receive the IRA distributions, providing long-term financial support for your children or grandchildren and protection against meddlesome exes or others you don’t want to be involved in your children’s inheritance.

IRAs and estate and income taxes 

It’s important to sit down with an estate planning attorney to determine how your IRA will be taxed and plan accordingly.

For those with large estates, a life insurance policy and life insurance trust could be taken out to offset the cost of those estate taxes for your beneficiary.

Remember, in addition to estate taxes for those with a large estate, your IRA distribution will also trigger an income tax for your recipient, regardless of the size of your estate.

Roth IRAs are an exception to the income tax for beneficiaries. Whether a Roth IRA makes sense is something you can explore with your tax advisor and your financial planner. Like many legal, tax, and financial strategies there are no one-size-fits-all solutions.

Because of the estate and income taxes that occur when IRAs are passed on to beneficiaries, they’re an excellent way to include some charitable giving as part of your estate plan.

If you donate your IRA value to a charity, you’ll have a charitable contribution deduction as well as the ability to bypass loss of the IRAs value through income tax.

If you are interested in benefiting your church or another charitable goal, it’s always an excellent idea to bring this up with us as your estate planning attorney and with your financial advisor as well, so we can help you build a plan that lets you give back.

Turning even a modest IRA into a massive advantage for your family

One way to make the most of an inherited IRA is to take a stretch-out approach.

This strategy lets your beneficiary stretch the length of time over which they’ll be collecting money from the IRA, giving it more time to accrue growth without income taxes eating away at it.

When this is paired with a retirement trust, the result can be a vast, long-term inheritance for your family, even if your IRA is only a modest amount.

This is just one of several ways you can work with estate planning attorneys to make sure your loved ones get the most out of your hard-earned wealth for years to come.

Even though passing your IRA to your spouse or onto the next generation may seem relatively straightforward, there are plenty of pitfalls along the way without the guidance of an expert.

Talk with an estate planning attorney to review your current IRA beneficiary forms to make sure everything is up to date and works to achieve your goals.

How a Small Business Owner Should Plan for the Unexpected

If you are a small business owner, your focus is on keeping the company running on a daily basis. However, you also need to plan for how your business will survive if something unexpected happened to you.

Without a plan, your business is disrupted, which harms your customers, employees, and ultimately, your family

A business owner needs to focus on today, but what happens to your business if you can’t run it needs to be on the top of your to-do list.

Below are some tips on how to protect your business and make sure it stays on track and operating day-to-day in your absence.

Small Business Needs To Be Proactive

If you are the only owner of your business, then you need to have a clear plan on how the company will operate in your absence.  Some things to consider:

  • who makes the critical and day-to-day decisions,
  • who can pay bills, write pay your employees, or take out a loan to if the business needs money, and
  • what will ultimately happen to the business if you die?

If your business has several owners, then you must have a buy-sell agreement.

This contract outlines the agreed upon plan for the business should an owner become incapacitated or die. Provisions in the buy-sell agreement include:

  • how the sale price for the business and an owner’s interest are determined,
  • whether the remaining owners will have the option to buy the incapacitated or deceased member’s interest, and
  • whether certain individuals can be blocked from participating in the business.

Have an Estate Plan

A properly executed will or trust will allow you to state how you would like your assets to be transferred — and who will receive these assets — at your death.

A will or a trust also lets you identify who will take charge of the assets and manage their disbursement (including your business accounts) according to your wishes.

A will can be used to pass assets at death, but a properly created and funded trust allows any assets owned by the trust to bypass the cumbersome probate process.

Your assets are passed to your heirs faster and may reduce the legal fees and estate taxes your heirs will owe.

Additionally, a trust can help your loved ones manage your trust assets if you become incapacitated.

While you are alive and well, you typically act as the trustee of the trust, so you can manage your business and assets with little change from the way you do now.

A trust allows your successor trustee to step in manage things if you become incapacitated.

This process avoids court involvement, allows for a smooth transition of trust management (which can be very important if your business is an asset of your trust), and proper continuing care for you in your time of need.

Although having a will can be a great way to start, most business owners are much better off with a trust-based estate plan.

Purchase Additional Insurance

Whether you own the business by yourself or are a co-owner, it is essential to have separate term life insurance and a disability policy that names your spouse and children as beneficiaries.

The money from these policies will help avoid financial hardship while the buyout procedures of the buy-sell agreement are being carried out.

Next Steps

Having a plan for your business in the event, you are unable to continue managing the company is essential to keep your business going.

An attorney can explain the many options you have to protect your enterprise so that you can focus on what you do best — running your company.

How a Family Loan Impacts Your Estate Plan

Parents always want to do whatever they can to help their children as they leave the nest and venture out on their own.  Parents often want to help their children start a business or buy a home.

This allows their children to skip the traditional bank and get a loan from their parents or grandparents.

However, many parents don’t realize these loans can impact their estate.  Or realize these loans can also be an estate planning tool.

How a Loan Impacts Your Estate Plan

The money you lend to other people is an asset. 

Your executor or successor trustee is under a legal requirement to collect the outstanding obligations – even if the borrower is a family member.

If the amount of money that you have lent out is significant — and “significant” can be relative — it is important to let your estate planning attorney about the loan to help plan your estate.

If you wish to forgive the debt,  there are special terms that must be included in your trust or will for this to happen.

Or you may want the borrower to use their inheritance to repay the loan.  Your estate planning must address this scenario.  

Lending as an Estate Planning Tool

Loans are a smart estate planning tools for families if the loans are correctly structured and well documented.

There are many benefits to the lenders (grandparents or parents): 

  • loans can essentially give access to an inheritance without any immediate gift or estate tax problems, 
  • loans can generate a better return on their cash than they could with bank deposits, and
  • borrowers (usually children or grandchildren) can take out loans at interest rates lower than commercial rates and with better terms.

Also, the Internal Revenue Service allows borrowers who are related to one another to pay very low rates on intra-family loans.

Lastly, the total interest paid on these types of transactions over the life of the loan stays within the family.

If appropriately structured and appropriately, intra-family loans may effectively transfer money within the family, for the purchase of a home, the financing of a business, or any other purpose.

These loans are a sophisticated estate tax planning strategies as a way to shift assets into special estate-tax saving trusts. These intra-family loans help families across the wealth spectrum and are often used for home improvement, an automobile purchase, or a business. 

There are several points to keep in mind regarding these types of loans:

  • the loan must be well-documented,
  • lenders should usually ask for collateral,
  • the lender should make sure the borrower can repay the loan, and
  • the income and estate tax implications should be examined thoroughly.

Next Steps

If you or someone you know has lent money to a family member, you should contact an estate planning attorney see how the loan could affect your estate plan and discuss your options.  

How to Leave an Inheritance to Adult Children

When considering how to leave an inheritance to adult children, the first step is to decide how much each one should receive.

Most parents want to treat their children fairly, but this doesn’t necessarily mean they should receive equal shares of your estate.

For example, it may be desirable to give more to a child who is a teacher than to one who has a successful business or to “compensate” a child who has been a primary caregiver.

Some parents worry about leaving too much money for their children. They want their children to have enough to do whatever they wish, but not so much that they will be lazy and unproductive.

So, instead of giving everything to their children, some parents leave inheritances for grandchildren and future generations through a trust, or make a generous charitable contribution.

When deciding how or when adult children are to receive their inheritances, consider these options:

Give Some Now

Those who can afford to give their children or grandchildren some of their inheritance now will experience the joy of seeing the results.

Money given now can help a child buy a house, start a business, be a stay-at-home parent, or send the grandchildren to college–milestones that may not have happened without this help.

It also provides insight into how a child might handle a larger inheritance.

Lump Sum

If the children are responsible adults, a lump sum distribution may seem like a good choice–especially if they are older and may not have many years left to enjoy the inheritance.

However, once a beneficiary has possession of the assets, he or she could lose them to creditors, a lawsuit, or a divorce settlement. Even a current spouse would have access to assets that are placed in a joint account or if the recipient adds the spouse as a co-owner.

For parents who are concerned that a son- or daughter-in-law could end up with their assets, or that a creditor could seize them, or that a child might spend irresponsibly, a lump sum distribution may not be the right choice.


Many parents like to give their children more than one opportunity to invest or use the inheritance wisely, which doesn’t always happen the first time around.

Installments can be made at certain intervals (say, one-third upon the parent’s death, one-third five years later, and the final third five years after that) or when the heir reaches certain ages (say, age 25, age 30 and age 35).

In either case, it is important to review the instructions from time to time and make changes as needed.

For example, if the parent lives a very long time, the children might not live long enough to receive the full inheritance–or, they may have passed the distribution ages and, by default, will receive the entire inheritance in a lump sum.

Keep in mind that pushing assets out of a trust in installments, leave assets vulnerable to the problems mentioned above in the “lump sum” option.

Assets can be lost in divorce, seized in lawsuits, or spent foolishly. Some parents are concerned about lump sum, or installment gifts will fuel an addiction.

Keep Assets in a Trust

Assets can be kept in a trust and provide for children and grandchildren, but not be given to them. Assets that remain in a trust are protected from a beneficiary’s creditors, lawsuits, irresponsible spending, and ex- and current spouses.

The trust can provide for a special needs dependent, or a child who might become incapacitated later, without jeopardizing valuable government benefits.

If a child needs some incentive to earn a living, the trust can match the income he/she earns. (Be sure to allow for the possibility that this child might become unable to work or retires.) If a child is financially secure, assets can be kept in a trust for grandchildren and future generations, yet still provide a safety net should this child’s financial situation change.

This is our preferred method of inheritance planning as it’s a win/win for all.  Assets are protected yet available.

3 Ways Not to Leave Property for Your Children

Estate planning offers many ways to leave your property to your children, but it’s just as important to know what not to do.

Here are some things that are all-too-common, but textbook examples of what not to do or try.

Oral Wills

If you feel you have a good rapport with your family or don’t have many assets, you might be tempted simply to tell your children or loved ones how to handle your estate when you’re gone.

However, even if your family members wanted to follow your directions, it may not be entirely up to them.

Without a written document, any assets you own individually must go through probate, and “oral wills” have no weight in court.

It would most likely be up to a judge and the intestate laws written by the legislature, not you or your desired heirs, to decide who gets what.

Joint tenancy is one strategy not even to try.

Joint Tenancy

Instead of setting up a trust, some people name their children as joint tenants on their properties.

The appeal is that children should be able to assume full ownership when parents pass on while keeping the property out of probate.

However, this does not mean that the property is safe; it doesn’t insulate the property from taxes or creditors, including your children’s creditors if they run into financial difficulty.

Their debt could even result in a forced sale of your property.

There’s another issue.

Choosing this approach exposes you to otherwise avoidable capital gains taxes.

Here’s why.

When you sell certain assets, the government taxes you. But you can deduct your cost basis—a measure of how much you’ve invested in it—from the selling price.

For example, if you and your spouse bought vacant land for $200,000 and later sell it for $315,000, you’d only need to pay capital gains taxes on $115,000 (the increase in value).

However, your heirs can get a break on these taxes if you use a trust.

For instance, let’s say you die, and the fair market value of the land at that time was $300,000.

Since you used a trust rather than joint tenancy, your spouse’s cost basis is now $300,000 (the basis for the heirs gets “stepped-up” to its value at your death).

So, if she then sells the property for $315,000, she only has to pay capital gains on $15,000, which is the gain that happened after your death!

However, with joint tenancy, she does not receive the full step-up in basis, meaning she’ll pay more capital gains taxes.

Giving Away the Inheritance Early

Some parents choose to give children their inheritance early–either outright or incrementally over time.

But this strategy comes with several pitfalls.

First, if you want to avoid hefty gift taxes, you are limited to giving each child $14,000 per year. You can give more, but you start to use up your gift tax exemption and must file a gift tax return.

Second, a smaller yearly amount might seem more like current expense money than the beginnings of your legacy, so they might spend it rather than invest.

Third, if situations change that would have caused you to re-evaluate your allocations, it’s too late. You don’t want to be dependent on them giving the cash back if you need it for your own needs.

Shortcuts and ideas like these may look appealing on the surface, but they can do more harm than good.

Consult with an estate planner to find better strategies to prepare for your and your families’ future.