3 Unique Ways to Handle the Guilt Inherent to Being a Parent

June 2, 2020

If you’re a parent, you may feel even more guilty than usual.  If so, you are definitely not alone. Currently, the burden is on you to both carry on with your work and manage your child’s full-time care and education. Two full-time jobs that you’re trying to do by yourself, likely without teachers or care providers to help you. If you are like most parents, you were probably struggling with guilt even before the virus. You simply can’t make it to every award ceremony or recital, and you might not have as much time to play with your kids or help them with their homework as you’d like. Those feelings of guilt may now be compounded by all the additional responsibilities you’ve had to take on in a short space of time. Take a deep breath, and let me let you off the hook here for a minute. I have no doubt you are doing the best you can, and your kids see it, and know it too, even when they are being ungrateful pains in the rear. I’ve got a few ideas about how to shift the guilt. They’re a little unconventional, but I invite you to give them a try and then message me to let me know how they went. We love hearing from you. Let’s start with one thing that is fully within your control, can help to alleviate feelings that you are not doing enough, and that you can get handled easily, for free, right now— name legal guardians for your kids, so the people you want will take care of them, if anything happens to you. Name Legal Guardians If you have not already legally documented who you would want to raise your children, if you could not finish doing it yourself for any reason, start here right now and name legal guardians using the free website I have for you to get it done protectmykidsma.com. It’s free. It’s easy. And the site guides you through who to choose and creates a legal document for you. Legally documenting your choices for who you want to take care of your kids if you can’t is a great first step to getting legal planning in place for the people you love. (Yes, I said “choices” because you want to name at least one person with two alternates.) And, doing so can provide you with a lot of relief, if you have not taken care of this yet for your kids. After you are done, contact us for a no-charge review of the documents, and we’ll guide you to the next step in ensuring the well-being and care of your kids (and your assets), if something happens to you. If the parents get sick with COVID-19, this is one of the most important things you can do for your kids right now, and we’re making it as easy as possible for you to get started with it. So that’s one way we can support you to remove some of that mom or pop guilt you may have. And, here’s another… Quality Time Doing…Nothing While you’re probably already […]

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Take Control of Your Investments Now

May 26, 2020

Last week, we shared that the CARES Act makes it possible for you to access money in your retirement account now to keep your business afloat without taxes or penalties. If you missed it, you can go back and read that article here. In that article, I said that this could be a good time for you to take your money out of your retirement account and reinvest it on your own terms, rather than hold it in a place where it’s vulnerable to the ups and downs of the stock market. If you are considering that as an option, it might be time to consider a Self-Directed IRA (SDIRA), which gives you control over your finances rather than giving up that power to a broker, a robo-advisor or investments you don’t really understand. An SDIRA is an IRA that allows you to invest in different assets beyond the typical stocks, bonds, and mutual funds of a traditional plan. They’re available in both the form of a traditional IRA (which allows you to make tax-deductible contributions) or Roth IRA (where the distributions are tax free). If you move your IRA assets into an SDIRA, you will have the freedom to invest in a greater variety of assets. And depending on those investments, you may be able to get higher returns at faster rates, but most importantly you’ll be able to be deeply connected to what your IRA is invested in. It also could help you hang on to value that isn’t subject to sudden dips that you don’t understand, the way the stock market is. It is definitely a big decision. The most important thing you can do is get clarity on what your current investments are and what you want them to be. Here’s how to get started. Carefully Read Your Financial Statement First, log in to your retirement account right now, or go through your records to find your last paper statement. It’s time to figure out what exactly is going on in there. Many brokerages select investment funds for your portfolio based on rates of growth. For example, you may be typed for “slow-growth” or “conservative” or “income” or “high growth” investment plans based on what you indicated as your time frame for retirement when you opened the account. Based on whatever you indicated when you opened your account, your broker or robo-advisor will offer investment options based on a few tiers of growth and risk, and you probably don’t know exactly what stocks you are investing in. Labels like “slow-growth” or “conservative” aren’t enough to tell you exactly where your money is invested. However, your last statement should contain the names of the funds, and you can go from there to do your research. You can then look up the funds on sites like Yahoo Finance to see what your investments comprise. What do you think? Do you like what you see? What would you rather not have money invested in? What’s missing that you would like to have money invested in? Note the answers to these questions and use them to inform your next move. […]

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Another Way to Fund Your Business Through the CARES Act

May 19, 2020

You may have heard the news that there have been 3 million applications for SBA loans through the recent CARES Act, to the point that the act has reached its funding limit of $349 billion. As a business owner who may have applied for the $10,000 EIDL grant only to later find it is actually $1,000 per employee, or a PPP loan that didn’t get funded before the money ran out, you may be wondering what else is possible. If you’re starting to feel overwhelmed or discouraged, listen up! I’ve got an idea for you if you have a retirement account you’ve been saving, whether for retirement or a rainy day. Well, it’s raining, and it may be the time to use that retirement money to fund your future, now. Did you know that the CARES Act has amended normal rules for withdrawing money from qualified retirement accounts?  Normally, if you were to withdraw money from your retirement account before retirement age (generally 59 1/2 years old), you’d have to pay it back within 90 days. Otherwise, you would be penalized with a 10% fee as well as have your withdrawal taxed. Now, in 2020, the CARES Act has modified those rules in order to support people whose personal and business finances have been impacted by COVID-19, which is everyone. And you may be able to use that modification to keep your business alive, even if you don’t get PPP or EIDL loan money. The act specifies that the new 2020 rules give you three years to pay back the loan from your retirement plan (without penalty or taxes) rather than the normal 90 days. The retirement accounts you can withdraw from include traditional individual retirement accounts (IRAs), 401(k)s, and 403(b) plans. The waiver applies to coronavirus-related distributions made between January 1, 2020, and December 31, 2020.  To be completely clear, the law says that the withdrawals do have to be related to COVID-19. This explicitly includes “closing or reducing hours of a business owned or operated by [an] individual due to COVID-19.” So if you have, by law, had to close down your business completely, stop in-person business and make a major (perhaps costly) switch to conducting business virtually, or reduce hours for any other reason, you’re eligible. It also applies to people who have had their work hours reduced, which can be especially relevant if you are an independent contractor. If you are eligible, you can take out up to a total of $100,000 or 100% of the qualified retirement account (whichever comes first). You can pay back the funds to that retirement plan over a three-year period, beginning the day after the date you receive your first coronavirus-related distribution. The amount of money that you pay back for the loan over that period of time will not be recognized as income to be taxed. However, income taxes will be owed on the amounts you withdraw if you don’t repay them in that three-year period and the 10% penalty will also be applied. Because this amount will ultimately have to be either repaid or taxed, it’s important to […]

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Should You (or Your Parents) Be in the Stock Market Now?

May 12, 2020

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 has lost $17,000 over the last two weeks. Mom had picked her investments with the help of a friend many, many years before, and had not 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 does not 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 how to 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 will offer investment options based on a few tiers of growth and risk, and […]

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Protecting Your Parents From Undue Influence During Covid and Beyond

May 7, 2020

In a previous article, we shared steps to understanding your parents’ estate planning and the nature of their assets, as well as how to ensure you’re not left with a mess when something happens to them. Today, we want to focus on one of the major risks of not being “in the know” when it comes to your parents’ estate planning matters: the undue influence of bad actors. It’s an unfortunate fact that predators emerge during times of upheaval to take advantage of people. That means the COVID-19 pandemic can leave your parents vulnerable in more ways than one. But even when things go back to normal, this chronic problem of financial exploitation will still be a risk. We see it happen far too often. Maybe your elderly parents live several hours away, in another state or country, and someone in their community gets close to them. Or maybe they have a close relationship with a financial advisor who isn’t really looking out for their (or your) best interests. This person could even be another family member, friend, business partner, hired caregiver, professional advisor, or even someone they’ve just met. Sometimes, when bad actors become involved with your parents’ lives and assets, it can lead not only to a loss of money, but even a loss of personal freedom. One of the worst cases of this I’ve heard of is the case of Milo, a retired veteran living in Arizona, and his son Greg, who lived in Northern California. It all started when Milo asked Greg to help him protect his small amount of money from a family member who was “borrowing” it freely. All Milo had was a savings of $140,000 and payments of $3,700 per month from social security, a pension, and veteran’s benefits. To help his father out, Greg applied for guardianship of Milo’s money, and the court granted it to him. At the same time, without notifying Greg, the court appointed a professional financial Conservator that neither Milo nor Greg knew. The Conservator quickly set to draining Milo’s small savings, with the court barring Greg from filing any more motions. The situation escalated even further when the Conservator decided to move Milo from his assisted living facility to a cheap lock-down facility, where he wouldn’t even have access to the outdoors. This would, of course, free up more money for the Conservator to access. Before this could happen, though, Greg hurried to pick his father up and bring him back to California with him. Now, the two are essentially on-the-run from authorities, who are trying to bring Milo back to Arizona and under the control of the Conservator. Milo and Greg are out of funds and are now trying to raise the $15,000 it would take to hire a lawyer and free Milo from this terrible situation. The scariest part is that Milo and Greg had all the proper legal documents in place. Sometimes, though, that is not enough to protect your parents from being taken advantage of—even to this extreme of a level. Especially in a time of stress and confusion like the COVID-19 pandemic […]

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Are You Clear About How Your Parents Estate Plan Will Impact You?

April 28, 2020

Do your parents have an estate plan? Is it up to date? No matter how rich or poor you or your parents are, especially in the wake of the COVID-19 pandemic, you need to be asking these and several other questions. When your parents become incapacitated or die, their affairs will become your responsibility, and it will be impossible to ask them to clarify anything. So, if you do not know whether or not they have estate planning in place that will help you best support them, read on. The Best-Case Scenario In a best-case scenario, your parents have an updated estate plan, and they’ve walked you through it. They have provided an inventory of their assets that’s easy for you to find listing out everything they own, how it’s titled, and who it should go to and how. Ideally, it also includes directions on how to handle their non-monetary assets, and an audio recording or written stories that pass on their values, insights and experience. On top of all that, it’s best if they’ve introduced you to the lawyer who set it all up, so you know who to turn to when the time comes. Less-Than-Ideal Scenarios If that’s not the case, you could have some holes to fill. If they’ve not done any planning at all, now is the time to encourage them to get it done, and support them in any way you can. If they already have a completed plan, it’s likely that it has been sitting on their shelf or in a drawer for years, not updated, with no inventory of their assets and no way to capture and pass on their intangible assets. Even worse, their lawyer could have been using outdated systems that are no longer recognized, which can lead to trouble down the road. It’s also possible they’ve never updated their estate plan, it no longer tracks with their current assets, and may even require complex actions that are no longer necessary upon their death. Worst of all, you may have no idea what your parents own or how to find their assets, and at their incapacity or death you’ll be left with a mess, even though your parents had good intentions and thought their planning was handled. The Worst-Case Scenario In a worst-case scenario (which we see more frequently than we’d like), your parents may have worked with someone who exerted undue influence over their decisions. This person may have led them to write something into their plan that they either didn’t really want to or wouldn’t otherwise have chosen if they understood all of their options. Either way, it’s critical for you to know who your parents have worked with to create their estate plan, and how and why they made the choices they did. If you aren’t in the know, now is the time to find out. If you and your parents are already discussing these matters, but have not yet included you, you can ask them to schedule a family meeting with their existing attorney. On your parents’ request, that attorney should look forward to walking you through […]

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Time to Operate as a Real Business!

April 21, 2020

With many states passing laws that impose significant risk on employers who mischaracterize employees as independent contractors, you may be considering incorporating to strengthen your position that you are not an employee. If so, we think that’s smart. While the burden is on the employer to prove that a worker is not an employee, you can take action to help the people or companies who employ you to feel confident that they could successfully argue you are an independent contractor, and not an employee by incorporating your business and operating as a real business. On top of that, incorporating can save you money, protect your assets, and limit your liability. Up until now, you may have shied away from incorporation because of the upfront cost of hiring a lawyer or because you didn’t understand the benefits incorporating can bring to you. To help you decide whether incorporation is right for you, consider the following factors. Legal Protections Incorporating as a business protects your personal assets, if you properly maintain your corporate form. This means keeping your personal and business finances separate, and having all agreements be between your corporate entity and your clients and vendors. It may sound complicated, but it’s actually quite simple when you know how to do it, and it can provide you with a level of peace of mind that supports you to want to expand your business to the next level of income and impact. We’ve found that many of our clients who were stuck earning less money than they wanted, were able to get to their own next level of income success by incorporating and treating their business like a business. Tax Consequences Perhaps you have remained a sole proprietor so you don’t have to file a corporate tax return, but this is short-sighted and likely costing you a lot of money and opportunity for savings on your taxes. Think of it as stepping over dollars to pick up dimes, simply because the dollars were a little more difficult to pick up. Wouldn’t it be worth a little effort to pick up the dollar, if someone showed you how easy it could be? Filing a separate tax return for your business is not that difficult, and could save you a lot of money on your taxes PLUS allow you to write off expenses that you may not be writing off right now, and reduce your risk of tax audit. Filing as a sole proprietor or writing off business expenses on Schedule C of your personal tax return could increase your risk of audit by 7-9 times. And, on top of that, when you are a sole proprietor you need to pay payroll taxes on all of your income, whereas if you are incorporated and file your taxes as an S-Corporation, you only pay payroll taxes on the salary you pay yourself, which can be low (and reasonable), and you save yourself approximately 15% on the rest of your distributed income. If you have been considering incorporating as a business, now could be the time. Contact us and let’s discuss the possibilities for you and […]

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The Most Important Legal and Financial Actions To Take Right Now

April 14, 2020

As you already know, the COVID-19 pandemic means nothing is business as usual. Many states have implemented a “shelter-in-place” order to limit the spread of the disease; however, if you are not in a place with such an order, or if your parents are not following it, you may want to refer to our previous blog on how to talk to your parents and get them to stay home. Once you have attended to your (and your parents’) immediate needs, it will be time to consider more long term precautions. In this time of stress and chaos, your parents may be resistant to talking about estate planning. It may feel too pessimistic to plan for the worst in the midst of a scary situation. However, that’s exactly why it’s the most important time to do so. Plus, since hopefully you are staying inside, you may actually have the time to dedicate to getting these tasks taken care of. Here are actions you can, and should, take to ensure you and your family are protected both legally and financially. Update Your Health Care Documents Above all, you first need to ensure that both you and your parents have advance care directives. This will be an invaluable reference point for those who are assisting you, whether they be friends, family, or medical professionals. This directive should include instructions on your preferred methods of care and the contact information for each of your doctors. You must also clearly state who will be in charge of handling your affairs in the event of your death or incapacity. Even if you have done this already, I urge you to take out any existing documents now and review them. Have your circumstances changed? Do you have additions to make? Encourage your parents to do the same thing, and to communicate with you about what their directives say. Here’s an article to read, and share with your parents (and adult kids, if you have them) on the 3 parts of a Health Care Directive, and the 5 things you want to look for in your Health Care Directive right now, to ensure it’s up to date for Covid-19. If you are unsure whether your Health Care Directive is in ship-shape, call us, as your Personal Family Lawyer®, to take an expert look at them. Create a “Personal Resource Map”—an Inventory of Everything That Matters You might think that only the very rich need to worry about making specific plans for their assets. But not so fast. Do you have investments or a retirement account? Physical things like jewelry, musical instruments, or furniture? What about crypto? Or even social media accounts? In the event of your incapacity or death, your family members won’t know where to look for what you have, or how to access it, unless you’ve planned for that ahead of time. Somewhere between 49 and 80 billion dollars are currently unclaimed, or unable to be claimed, by family members of people who have passed away. This is money that individuals may have forgotten they had, or that they made no provisions to pass on to […]

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The Most Important Legal and Financial Actions To Take Right Now For You And Your Business

April 7, 2020

Owning a business is challenging even in the best of times. Add a global pandemic, the likes of which we have never seen in our lifetime, and it becomes much more overwhelming. Often, business owners try to compensate for shortcomings in their business by bringing in more and more revenue. For many people, however, business closures and quarantines have seemingly eliminated that option. At the moment, you may be running around like your hair’s on fire, trying to find any possible way to bring in more money. You may feel like you are too busy trying to control the present to worry about the future. Take some comfort in the fact that you’re not alone in feeling this. Now more than ever, though, it’s important to remember our “LIFT” principle. Take a breath and consider your legal, insurance, financial, and tax situation, and whether the pillars of LIFT can help you get through this time. If you need to talk with someone, to brainstorm options about how you can shift from your previous income model to one that will work virtually or in an innovative manner considering current conditions, reach out to us and schedule a call to see how we can help. If revenue is not an issue, and you are ready to pivot, awesome—do it, and let us know how we can support. Here are 3 things that you can do as you pivot to create the most stability for you and your team. Create or Update Your “Personal Resource Map” To put it bluntly, you need to be ready for the worst case scenario, both personally and professionally. Setting up an estate plan is important for every individual, even if you don’t think you are rich enough to need one. If you own anything—from a laptop computer, to a guitar, to a house—something will need to be done with it after your death. There’s also a possibility that you have assets that you have completely forgotten about, like that 401k from a job you had several years ago that you never rolled over. Currently there’s somewhere between 49 and 80 billion dollars in legal limbo that family members cannot claim due to a lack of preparation on the part of the deceased. You don’t want your assets to become trapped in gridlock instead of passed on to the people you love. When you own a business, there is a whole set of other issues to consider. Putting your wishes into an estate plan, regarding things like a succession plan, will be enormously helpful to whoever is managing your affairs in the event of your death or incapacity. If a whole estate plan feels too overwhelming right now, at least get an inventory of your assets and business in place, where everything is and how your loved ones/partners and team could access it, if you become ill or die. We’re supporting you to do this with a simple Personal Resource Map process.  We can help you with this on a 1:1 basis, fully virtually, just give us a call. Check Your Business Insurance Policy Now is the time […]

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4 Essential Strategies For Selling Your Business

March 31, 2020

As an entrepreneur, you’ve probably put lots of thought into the best ways to start and grow your business. But you likely haven’t put nearly as much effort into thinking about how you’ll sell it or exit it, in general. And if you decide that selling is the way to go, you’ll want to start considering that now, whether you are just starting out or have been in business for years. Putting your business up for sale is not something you want to do on the fly or without careful planning. You’ll need to clearly understand your company’s competitive position in the market, determine a realistic asking price, and carefully evaluate potential buyers’ suitability in order to position your business for sale. Before you put up a “For Sale” sign in your front window, review these four strategies to maximize your chances for success. Prepare your business for sale You don’t want to get stuck trying to sell your business at the last minute due to unforeseen circumstances, such as a debilitating illness or the arrival of new technology that renders your business model obsolete. It generally takes an average of two to four years to sell a business, so you should develop your exit strategy as soon as possible.Before you can come up with a sales price, you’ll need to gather and organize a hefty amount of documentation—financials, tax returns, business records, and other materials. What’s more, proper preparation is also vital for closing a sale: Buyers will be much more likely to purchase your company if they see you’ve taken the time to thoroughly prepare your sales portfolio. We can facilitate your planning and preparation by ensuring you have all of the proper records and documentation you need to properly value your business—and wow potential buyers. Effective valuation and pricing You no doubt want to see the maximum return on all of the hard work you’ve put into building your business, but you must be realistic. Valuing your operation should be based strictly on objective data like current market prices, cash flow, and growth forecasts. You can’t let emotions cloud your judgment, so seek the opinion of a professional appraiser for an optimal valuation. You must also determine the total cost of the sale. Before setting the price, carefully factor in all of the taxes, fees, and other expenses that will be deducted for the asking price, so you don’t end up shorting yourself. We can assist with accurately assessing all financial and tax obligations that come with a sale, as well as advise you on any potential legal issues that could influence the process. Vetting potential buyers While interested buyers will be investigating you and your operation, you should carefully vet them, too. Even if it’s a friend or colleague you know well, you’ll should carefully select and pre-qualify every potential buyer. And since you’ll be sharing sensitive company data with them, you should require buyers to sign a confidentiality agreement, not just to protect your privacy, but also to weed out those who aren’t serious. And don’t just sell to the first person to walk through […]

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