27August
2015
Protect Estate Assets from Creditors with a DAPT Trust

When developing an estate plan, you may want to consider setting up trusts for various reasons, including protecting your assets from potential creditors. One way to accomplish this, depending on where you live, may be to set up a domestic asset protection trust (DAPT), which are also called self-settled trusts. With these trusts, you transfer estate assets into an irrevocable trust, naming yourself as the beneficiary. The trust assigns an independent trustee who has absolute discretion over how funds will be spent. Because you don’t control the funds in the trust, creditors cannot reach them. The trust should contain a spendthrift provision,…

27August
2015
Must Joint Activities Be Treated as Partnerships?

For federal income tax purposes, an unincorporated joint venture or other contractual or co-ownership arrangement under which several participants conduct a business or investment activity and split the profits is generally treated as a partnership. This general rule applies even if the joint venture or arrangement is not recognized as a separate legal entity (apart from its owners) under applicable state law. In other words, a partnership can exist for federal income tax purposes even though no partnership exists for state-law purposes. On the other hand, under certain circumstances, taxpayers can “elect out” of partnership status when a partnership would…

27August
2015
Time to Switch Your C Corp to S Corp Status?

Thanks to current tax law, the federal income tax rates for individuals remain historically low for single taxpayers with taxable income below $400,000 ($450,000 for married couples filing jointly). That’s the good news. The bad news: The rates for C corporations remain at the same levels that have been in place for years. So you may wonder if you should switch a family C corporation to S corporation status? Then, all the company’s taxable income would be passed through to you and the other shareholders and taxed at the reduced rates for individuals. You also wouldn’t have to worry about…

13August
2015
A Strategic Plan Should Also Include a Succession Plan

Many small businesses prepare — and regularly update — a strategic plan, but many overlook this important task. Whether your business falls into the “have” or a “have-not” category, a strategic plan can be an invaluable resource to help your company accomplish its ultimate objectives. And part of this process involves having a succession or exit plan. The Anatomy of a Strategic Plan First, let’s review some basics about strategic planning. Fundamentally, it is an activity that helps: Set priorities Focus energy and resources Strengthen operations Ensure that employees and management work toward common goals Establish agreement around intended outcomes; an Adjust direction as…

13August
2015
How To Recognize a Good Leader for Your Company

Traditional interviews, background checks, and clever “scenario” questions might help you turn up a good leader. But sometimes, in spite of your best efforts, you end up hiring a problem, and then struggling to get rid of him or her. Here are some characteristics of good leaders and bad, that may help you find the pearls and avoid the pain. Good Leaders…… Know how to build consensus when new strategies are needed. When staff members buy into a change, the chances for success are much better. Understand that it is better to let other people sing your praises rather than blowing…

13August
2015
A Family Business Does Not Have to Be a Casualty of Divorce

Divorce is difficult for all parties. But when there’s a family business involved, divorce can be a nightmare. Take a look at a couple of common questions: Should the enterprise be sold? Selling the business makes it easier to allocate the assets owned by the couple. But that solution is not common, since it generally leaves one or both spouses looking for work. Economic reality may force ex-spouses to try to continue working together, although taking that path obviously has problems of its own. What if a business has two locations? Perhaps each spouse simply take over control of one…