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You intend to pass along your hard-earned money and property through your estate plan, but what about your wisdom? Ensuring that you successfully pass all of this along may call for a family meeting to discuss your finances, your legacy, and your core principles. Most families lead busy lives, with many relatives seeing one another face-to-face only at a handful of major holidays throughout the year. The estate planning process is a perfect opportunity to bring everyone together outside of those scheduled occasions—even if a child or grandchild has to attend via video chat. Working with your estate planning attorney in collaboration with any other advisors you have in your corner can make this legacy-enriching process seamless and even enjoyable. However, bringing your family into the conversation is better yet, as they will get to learn new things about you and share stories and memories of their own. Here are a few topics you may want to address during your family meeting: 1. Your Rich Life Story You may think it has all been said before, but have you considered recording your personal life narrative? These recordings will be treasured by your loved ones while you are still here and long after you have passed away. To customize these recordings, have your family members ask you about your fondest memories and greatest challenges. You will be creating a sort of time capsule that contains the uniqueness of your personality and the experiences that shaped you into the person you are today. Perhaps most importantly, you will be able to share the valuable lessons you have learned. Your family will be better for it. 2. How You Would Like Your Wishes Honored Estate planning involves weighty decisions regarding your long-term care and who will be responsible for managing your financial and medical affairs in the event you cannot manage them for yourself, along with how your money and property should be passed on after your death. Although these are not the sunniest topics, letting your family know why you made your particular choices is important. It will allow your loved ones to understand firsthand the instructions included in your estate plan when the need to use it arises. 3. Your Family Tree Your loved ones may be curious about more than your life story. Take time to go over your family tree and answer questions the younger members of your family may have about your shared heritage. A who’s who on paper or in a digital format is an excellent gift to your loved ones that they will be able to reference and build upon in the years to come. 4. Significant Heirlooms Almost every family has heirlooms, each of which tells a story. It is common for estate plans to contain physical objects that matter dearly to their owners, such as antique furniture, garments, jewelry, hobby collections, and memorabilia. Keeping the story of an object alive and memorializing it in writing or through video may be more important than transferring its monetary value to the next generation. 5. Your Core Values Your estate plan can be customized to include specific language that incorporates your values while leaving room for your beneficiaries to grow and explore life on their own terms. Educational, incentive, and charitable trusts are a few tools you may use to express your values through your estate plan. You are much more than the wealth you have accumulated in your life. Likewise, your estate plan is about more than your financial worth. After all, wisdom and life experiences passed down from generation to generation can amount to something far greater than numbers on paper. We would love to help you build your estate plan to include a balanced representation of who you are and what you believe. We are here to coach you through the process of going over these topics with your family and weaving them into your estate planning tools. Call us today to set up a time , and we will get started right away.

Women are launching businesses at an unprecedented rate, yet the road to success is rarely smooth. While female founders are proving their resilience and innovation daily, they still face unique challenges—from securing funding to balancing leadership with personal life demands. But let’s be clear: female entrepreneurs aren’t just keeping up; they’re redefining success on their own terms. This Women’s History Month, let’s explore what it takes to build and scale a thriving business as a female founder. Rethinking the Funding Game Access to capital remains one of the biggest roadblocks for women in business. Despite running some of the fastest-growing companies, female founders receive a disproportionately small share of venture capital funding. The good news? Women are rewriting the rules of business financing. Crowdfunding has emerged as a game-changer, with women consistently outperforming men in campaign success rates. This isn't just about raising money—it’s about proving demand, building a loyal customer base, and demonstrating market viability from day one. Then there are female-focused angel networks and venture firms designed to support women-owned businesses. Investors are finally recognizing that businesses led by women often deliver higher returns. If traditional funding doors aren’t opening, women are finding new ones—or building their own. Additionally, some organizations and government programs offer grants specifically for women entrepreneurs. These grants can provide capital without the need for repayment, giving female founders an additional leg up. Understanding these resources and taking advantage of them can make all the difference in fueling business growth. Creating a Power Network Business can feel like a lonely climb—especially when you walk into a boardroom or networking event and realize you're the only woman in the room. But isolation isn’t an option for success. Savvy female founders prioritize connection. They join women-centric networking groups, mastermind circles, and industry-specific associations. These communities offer more than camaraderie; they lead to strategic partnerships, collaborations, and mentorships that fast-track success. Speaking of mentorship, finding a mentor who has already tackled the hurdles ahead can be transformative. A strong mentor not only provides guidance but also opens doors to opportunities that may otherwise stay hidden. And when women lift each other up, the entire ecosystem benefits. One powerful way to build a network is through collaboration over competition. Women entrepreneurs can seek out partnerships with fellow business owners, cross-promoting products or services and leveraging each other’s audiences. This creates a win-win situation where everyone benefits from increased exposure and sales. Scaling Without Burnout Scaling a business doesn’t mean working 24/7. The most successful female founders build businesses that grow sustainably—without sacrificing their well-being. Automation and delegation are non-negotiables. From customer service chatbots to automated invoicing systems, technology frees up time for the high-value work only a founder can do. Equally important? Hiring and trusting a capable team. Learning to delegate isn’t just a growth strategy—it’s a survival skill. Financial literacy also plays a key role. Women are often (wrongly) conditioned to be cautious with money, but successful female entrepreneurs embrace financial risk strategically. Working with a financial advisor, tracking key performance indicators, and building a cash reserve create a stable foundation for long-term growth. It’s also important to recognize the value of self-care in entrepreneurship. Burnout is real, and it’s more common among women who often juggle multiple roles. Establishing boundaries, taking regular breaks, and making time for activities outside of work can actually enhance productivity and creativity in the long run. Leading With Confidence Many women start businesses because they’re passionate about their work. But to scale successfully, passion must be paired with leadership. That means setting a clear vision, building a strong company culture, and confidently making decisions—even the tough ones. Women often struggle with imposter syndrome, second-guessing their own expertise. But here’s the truth: confidence grows with action. Every challenge overcome is proof of capability. The more female founders own their authority, the more they inspire others to do the same. Leadership also involves fostering an inclusive and empowering workplace. Women-led businesses often excel in creating work environments that prioritize collaboration, flexibility, and employee well-being. By embracing these strengths, female founders can build companies where employees feel valued and motivated to contribute to long-term success. Telling Your Story A compelling brand story can set a female entrepreneur apart from the competition. Consumers increasingly want to support businesses with values and missions they align with, and female founders have unique perspectives that resonate with audiences. Sharing your journey—why you started your business, the obstacles you’ve overcome, and your vision for the future—can create an emotional connection with customers. Authentic storytelling through social media, public speaking, and content marketing can turn a business into a movement, attracting loyal supporters and advocates. The Support You Need to Grow No matter where you are in your business journey - just starting off or already breaking barriers - you can achieve your goals faster and with more ease if you have a trusted advisor at your side. We am there for you every step of the way. When you work with me, we’ll start with a comprehensive LIFT Business Breakthrough™ Session—where we’ll analyze your foundational legal, insurance, finance and tax systems. From there, we’ll help you identify growth opportunities, and then together, we’ll create a customized plan for sustainable success. The barriers may be real, but they aren’t insurmountable. With the right strategy and support, you can grow a thriving business on your own terms. Book a call here to take the next step today.

A home is often one of the most important assets that people own. Therefore, most people want to stay in their home until they die and then have a loved one receive it. One common way to pass a home to loved ones is through a will. However, transferring property with a will requires probate, which is generally considered a lengthy, costly, and public court process that many actively seek to avoid. There are several ways an estate plan can transfer property without a will or probate court involvement when the owner passes away. In addition to a lifetime transfer of the property (by sale or gift), certain types of deeds can be used that take effect only upon the property owner’s death and do not subject the property to probate. However, using these deeds for probate avoidance can potentially introduce new issues. A trust-based estate plan may be a better option if the goal is simply to avoid probate. Home Ownership and Inheritance We are living through one of the largest intergenerational wealth transfers in history. Roughly one in six Americans expect to receive an inheritance in the next 10 years, and among those, nearly half anticipate inheriting property such as a house. According to Pew Research, in 2021, nearly two-thirds of US households lived in a home they owned as their primary residence. Homeowners have, on average, around $174,000 in equity in their homes—more than double the value of their next most valuable asset, retirement accounts, which have an average value of $76,000. Real Property, Legal Rights, and Trusts A key concept in estate planning is honoring people’s wishes by helping them control, as much as possible, what they own and what happens to it after their death. An estate plan enables a homeowner to decide what happens to their property after they pass away, ensuring that it goes to the person (or people) they choose in a manner of their choosing, whether that means keeping it in the family and setting limits on its use or transferring the property to a beneficiary without restrictions. Options for Transferring Real Property at Your Death Estate planning is highly flexible, offering multiple ways to satisfy someone’s wishes for what happens to their money and property when they die, each with a mix of benefits and downsides. To avoid probate, there are many ways to transfer real property, both during the owner’s lifetime and at their death. Some solutions can cost less than a trust, but as the examples below show, they can also have significant downsides and risks. Deed-Based Transfers A deed is a legal document that transfers real estate ownership from the current owner (the grantor) to another individual or entity (the grantee). Several types of deeds can be used to gift real property at the grantor’s death. They include the following: ● Life estate deed. A life estate, created through a life estate deed, gives a person the right to live in and use a property for their lifetime. The life estate’s owner is called the life tenant, and the person who receives the property after the life tenant’s death is called the remainderman. Some people may consider using a life estate deed to retain the ability to live in their own home while they are alive, allowing them to name the remainderman who will receive the property at the life tenant’s death. While a life estate avoids probate, the creation of the life estate can be undone only if the remainderman agrees. Because the goals, legal rights, and responsibilities of the life tenant and the remainderman may differ, disagreements may arise between them over, among other things, property use, improvements, or maintenance. In addition, a life tenant cannot liquidate or sell the property without the remainderman’s agreement. ● Enhanced life estate deed. Also known as a ladybird deed, an enhanced life estate deed allows the grantor (who becomes the life tenant) to retain the ability to live in their home and the right to use, mortgage, sell, gift, and otherwise convey the property during their lifetime without the signature or blessing of the remainderman. When the life tenant dies, if they still own the property at their death, the remainderman will receive it. This provides flexibility for a property owner wanting to name who will receive the property at their death while retaining control over it throughout their lifetime. However, this type of deed is not available in all states. ● Beneficiary deed. Also known as a transfer-on-death (TOD) deed, a beneficiary deed automatically transfers the deeded property to a named beneficiary at the time of the property owner’s death. The transfer avoids probate, and the deed can be revoked anytime during the owner’s lifetime. However, not all states allow beneficiary deeds. Again, not all of these types of deeds are legally valid in all states. An experienced estate planning attorney can explain what tools are available to you and discuss the benefits and potential risks. Downsides to Using a Deed to Transfer Property at Your Death There is no creditor protection for your beneficiaries. When a deed transfers property to a beneficiary, that property goes to the beneficiary outright. There are no strings attached and no protections. For instance, if the beneficiary were to receive the property during a bankruptcy proceeding, it might be used to satisfy the creditors because it is now considered the beneficiary’s property. There is no protection if the beneficiary is disabled or unable to manage their affairs. As previously mentioned, when the beneficiary receives the property, it is theirs. However, if they receive the property when they cannot manage their affairs, its management falls to another person. It may be handled by a court-appointed guardian or conservator or an agent under a financial power of attorney, who can do whatever they want with it (as long as it is in the incapacitated beneficiary’s best interest). Also, if the beneficiary receives any means-based assistance, the sudden inheritance could jeopardize those benefits by placing the beneficiary above any applicable asset threshold. There are no protections for you if you cannot manage your affairs. These deeds are a sufficient way to transfer property after you are deceased. However, if you cannot manage your affairs during your lifetime, the named beneficiary or remainderman has no access to or interest in the property to help you manage it until you pass away. You will have to rely on an agent under a financial power of attorney (if you have one) or a court-appointed guardian or conservator to manage the property on your behalf. Your beneficiary is free to do what they want. As already discussed, if you use a deed to transfer ownership at your death, your beneficiary will receive the property outright. You cannot add any conditions or requirements regarding the property or its use. The beneficiary can sell, mortgage, or use it as a rental property (subject to applicable zoning restrictions). It is their property to do with as they please. Their intended use of the property may not align with your wishes. Using a Trust to Transfer Real Property While you may view your home as a place to live and not as an investment or financial vehicle, that perception can change when you pass away and the home passes to a loved one, particularly if that loved one already has a primary residence. A beneficiary who inherits a home may decide to sell the property; turn it into a rental; renovate the property to use it as a farm or business; sell off individual structures on the property (such as a barn or historic structure); cash in on its natural resources (e.g., allow timber to be harvested); or even tear down the original home and build a new one in its place. When more than one beneficiary inherits the property, disagreements about how to best use it could arise. You might not care what happens to your home when you are gone. However, if you want to set restrictions on its use for any reason—whether those reasons are sentimental or have the practical intent of reducing conflicts among multiple beneficiaries—you must use the right estate planning tool. Consider placing your home in a living trust that legally owns the property, with you serving as a trustee and being the current beneficiary during your lifetime. This allows you to stay in your home—and maintain control over it—while you are alive. When you pass away, the home does not go through probate because you do not technically own it. Instead, a successor trustee assumes legal responsibility for the property and manages it or gives it away in accordance with your trust’s terms. The trust terms can be highly detailed, and limitations can be set on how the property can be used. You can stipulate, for example, that the property must be shared as a family vacation home and cannot be used for business purposes. You can require that the house be held in the trust until your minor children reach a certain age so they can remain in the home after your passing. While the trust owns the property, your terms will govern its use. As soon as the property is distributed from the trust, you lose all control over it. The Best Way to Transfer Property for Every Situation Estate planning is a highly personal process that must consider many factors, each of which can have multiple solutions that present a unique set of benefits and drawbacks. Avoiding probate is usually just one estate planning consideration among many, and it may not be desirable in every situation. Determining the best way to pass down real property at death depends on your preferences and family circumstances. An estate planning attorney can explain each available option and help you decide what is best for your situation.

If you are reading this, you need an estate plan. Why? The short answer is that everyone age 18 and older needs an estate plan. It does not matter whether you are old or young, have built up considerable wealth or are just entering adulthood—you need a written plan to control what happens to the things you own and to protect yourself and those you love. The Key Takeaways ● Every adult, regardless of their age or the amount of wealth they have accumulated, needs both a lifetime incapacity plan (a plan for if they are alive but are unable to manage their own affairs) and an after-death estate plan. ● Planning for incapacity keeps you in control of who will make decisions for you if you are unable to and allows your trusted loved ones to care for you without court interference—and without the potential loss of control over important decisions or expenditures for your benefit and the added expense of a guardianship or conservatorship proceeding. ● Every adult needs up-to-date healthcare directives to communicate their end-of-life wishes if they are unable to communicate them themselves. ● You need to leave written instructions to ensure that you maintain control over who is in charge of when and how your assets will be distributed. ● Every adult needs the counseling and assistance of an experienced estate planning attorney to ensure that they are implementing a legally enforceable and comprehensive plan for the future. What Is an Estate Plan? Planning for Death Your estate consists of everything you own—including your car, home, bank accounts, investments, life insurance, furniture, and personal belongings. No matter the size of your estate, you cannot take it with you when you die, and you probably want certain people to receive certain things you own. To ensure that your wishes are carried out, you need to provide written instructions stating who will receive your assets and belongings, what you want them to receive, and when they are to receive it—that is the essence of an estate plan. If you have young children, you also need to name someone to raise them in your place and manage their inheritance in the event that both parents are unable to do so. Lifetime Incapacity Planning A properly prepared estate plan will also contain instructions regarding your care (and the management of your assets) if you become unable to manage your affairs (sometimes referred to as being incapacitated) even for a short time due to illness or injury. Without the proper tools in place, your family will have to ask the court to appoint someone to manage your finances and medical care and for permission to use your assets to care for you. When relying on the court to make these determinations, the process is outside of your and your loved ones’ control, takes time, and can incur significant legal fees and costs, making an already stressful situation even more difficult for your loved ones. Depending on your family dynamic, this process can also be contentious if your family disagrees about who should manage your affairs or what the proper course of action for your care should be. Not only does this infighting threaten family harmony, it may also become a matter of public record, as most documents related to these types of proceedings will be available to anyone who requests them and pays a fee. It might surprise you, but having a plan in place can often have a more significant impact on and benefit for families with modest means because they may be unable to afford the court costs and legal fees associated with the court process known as probate. Here is an example: Sam and Meg had two young children together. Sam died in a car accident. Because he had no estate plan, the laws in his state divided his estate into thirds: one-third to Meg and one-third to each of their children. His estate included his one-half interest in their home, an inheritance he received from his grandfather (he was using this money to help support the family while looking for a higher-paying job), and a life insurance policy (but he failed to complete the beneficiary designation). Meg, a stay-at-home mom, was forced to go back to work after Sam’s death. The court set up conservatorships (in some states called a guardianship or guardianship of the estate) for each child to manage their inheritances, which required ongoing court costs, including accounting, guardianship, and attorney’s fees. When the children turned 18, they each received what was left of their inheritances in one lump sum, and there was not enough to cover their first year of college tuition. What You Need to Know Do not try to create an estate plan without the assistance of a professional. An experienced estate planning attorney who is familiar with the laws in your state can guide you in making difficult decisions such as who will raise your children and manage your affairs if you cannot. An experienced attorney will also know how to craft the appropriate estate planning tools so that your wishes are carried out. We Are Here to Help If you are ready to take control of your life and the legacy you leave behind for your loved ones, call or email our office now to schedule an estate planning consultation appointment. We make tough topics manageable to discuss. We can also craft a plan that addresses what you value most and protects you and those you care about.

The Truth About Business Insurance: Coverage Gaps Can Cost You Everything Running a business involves taking calculated risks, but there's one risk you should never take: having inadequate insurance coverage. While most business owners understand the importance of basic liability insurance, many are unaware of critical coverage gaps that could leave them exposed to devastating financial losses. In this article, I'll explore common insurance blind spots that might be putting your business at risk and show you how to protect your company's future. The Hidden Vulnerabilities in Standard Coverage Your standard business insurance policy might give you a false sense of security. Many business owners assume their general liability policy covers everything, but this common misconception can result in disastrous consequences. Standard policies often have significant limitations and exclusions that could leave you vulnerable when you need protection most. For instance, many business owners learn that their property insurance excludes specific natural disasters common in their area or that their liability coverage doesn't extend to certain types of legal claims. These gaps aren't just theoretical - they represent real risks that could potentially bankrupt your business. Worse yet, many businesses discover coverage gaps only after they’ve been sued. One example is professional liability coverage. Professional liability insurance policies often don’t cover intellectual property disputes, leaving businesses exposed if they face copyright or trademark claims. Without specific intellectual property coverage, a single lawsuit could result in devastating legal fees and settlement costs. Modern Risks Require Modern Protection Technology changes rapidly, so today's business landscape presents risks that didn't exist even a decade ago. Digital transformation has introduced new vulnerabilities that traditional insurance policies simply weren't designed to address. Remote work, cloud computing, and increasing reliance on technology have created exposure points that require specific coverage considerations. Cyber liability insurance has become essential, yet many businesses either lack it entirely or have insufficient coverage. A data breach can cost small businesses thousands or even hundreds of thousands of dollars, yet standard business policies typically provide little to no coverage for cyber incidents. Similarly, the rise of social media has created new reputation management risks that many policies don't address adequately. Reputation damage can directly impact a business's bottom line through lost customers, reduced sales, and damaged business relationships. Protecting your brand reputation isn't just about public image - it's about safeguarding your company's financial health. Environmental liability represents another modern concern that standard policies often exclude. Even businesses that don't consider themselves environmentally risky might face claims related to pollution, contamination, or environmental damage. For example, common issues like leaking storage tanks, mold, or chemical spills are typically excluded from general liability policies due to standard pollution exclusions. Without specific environmental liability coverage, businesses must pay cleanup, and remediation costs out of pocket. Essential Coverage Often Overlooked Beyond the gaps in standard policies mentioned above, several critical types of coverage are frequently overlooked by business owners altogether. They are: Employment practices liability insurance (EPLI). In an era of increasing employment-related lawsuits, many businesses remain unprotected against claims of discrimination, harassment, or wrongful termination. Business interruption insurance. The COVID-19 pandemic highlighted this gap dramatically, as countless businesses discovered their policies didn't cover interruptions caused by infectious diseases. While some lessons were learned, many businesses still lack adequate coverage for other types of interruptions, from natural disasters to supply chain disruptions. Key person insurance. Small and medium-sized businesses frequently depend heavily on one or two key individuals, yet many lack insurance to protect against the loss of these essential team members. The death or disability of a key person could devastate a business, but proper coverage can provide the financial cushion needed to weather such a crisis and transition successfully. Protecting Your Business's Future Understanding these coverage gaps is only the first step - taking action to close them is crucial. We start by conducting a comprehensive risk assessment of your business foundations. Together, we’ll also review your insurance coverage now, and on an ongoing basis to ensure your policies provide adequate protection as your business changes over the years. Most importantly, we’ll review the foundational systems that go hand in hand with insurance, including your legal, tax, and financial structures. Insurance alone is not enough to protect your business effectively. You need all four systems - legal, insurance, financial and tax (“LIFT”) to work in harmony.  To take the next step, book a LIFT Business Breakthrough Session so we can identify any gaps in your protection and develop a comprehensive plan to ensure your business is properly shielded from potential threats. With our support, you can focus on growing your business with confidence, knowing you're properly protected. Book a call here to learn more and get started today.

Trusts are widely used in estate planning to protect and transfer a person’s assets (money, accounts, property, etc.), sometimes in a tax-advantaged manner. Some trusts are highly complex, with multiple parties, intricate structures, specialized legal terms, and references to arcane tax law that can be difficult for the average person to understand. Scammers have long taken advantage of this complexity to dupe taxpayers into too-good-to- be-true trust solutions. The Internal Revenue Service (IRS) recently drew attention to a trust tax avoidance scheme involving what are known as § 643(b) trusts. It also warns about another type of trust scam that relies on the so-called pure trust or constitutional trust to make false claims about avoiding taxes and protecting assets. While legitimate trusts can be powerful tools for estate planning, asset protection, and tax efficiency, fraudulent trusts misuse these principles to deceive individuals. The IRS pays close attention to potential trust tax evasion schemes, and taxpayers who fall victim to a trust scam could potentially face civil and even criminal penalties, making it crucial to create a trust only with a qualified, reputable estate planning attorney. Trust Scams on the Rise According to the IRS, in the past few years there has been a “proliferation of abusive trust tax evasion schemes” targeting wealthy individuals, small-business owners, and professionals such as doctors and lawyers. These schemes falsely promise benefits such as ● the reduction or elimination of taxes, ● reduction or elimination of income subject to tax, ● depreciation deductions, and ● a step-up in basis for trust assets. These trust scams commonly use a layered structure to give the appearance that a taxpayer does not control the trust when in fact they do. Transparency of control over trust assets is important in determining, among other things, which party is responsible for paying any corresponding tax liability. The IRS also notes that abusive trust schemes frequently entail multiple trusts that distribute assets to one another. Trust funds may flow from one trust to another using rental agreements, fees for services, purchase and sales agreements, and distributions, with the goal of using inflated or nonexistent deductions to “reduce taxable income to nominal amounts,” says the IRS. Trust scam promoters typically charge $5,000 to $70,000 for a package that comes with trust documents, trustees, and tax return services, adding to the appearance of legitimacy. However, the IRS cautions that these phony trust arrangements will not produce the promised tax benefits. Types of Trust Scams The Pure Trust Scam One type of trust scheme highlighted by the IRS involves the transfer of a business to a trust it calls a pure trust or constitutional trust. The pure trust scam makes it look as though the taxpayer has given up control of their business even though they still run its day-to-day activities and control the income stream. Promoters of such scams often claim that placing assets in a pure trust can exempt them from taxes. They use misleading language and pseudo legal jargon to make it seem like these trusts have special legal status and may claim that they are based on common law or constitutional principles exempting them from state or federal jurisdiction. However, the IRS clarifies that there is no legal basis for these claims. Actor Wesley Snipes is a notable example of someone misled by a variation of the pure trust scam. Snipes relied on an argument that courts have repeatedly rejected—the “861 argument,” which misinterprets § 861 of the Internal Revenue Code (I.R.C.) to falsely claim that domestic income is not taxable. The IRS alleged that Snipes did not file tax returns for several years and committed fraud. He was convicted of tax evasion charges and served time in federal prison, in addition to owing back taxes, penalties, and interest. 643(b) Trust Scams Versions of the pure trust scam date back decades. Despite increased awareness of these scams and the IRS pursuing them in their various iterations, they continue to resurface, often rebranded under different names such as complex trusts and patriot trusts or targeting new demographics. The IRS details one such rebranding of the pure trust scam in a 2023 memorandum challenging trusts that similarly—and just as falsely—claim to avoid income and capital gains taxes. Promoters assert that these trust arrangements receive special tax benefits under I.R.C. § 643(b), hence the name 643(b) trusts. The IRS refers to them in the memorandum as a nongrantor, irrevocable, complex, discretionary, spendthrift trust—a complicated name for a complicated scam that, like the pure trust scam, relies on a misinterpretation of the tax code that takes it out of context. Although 643(b) trust scams take various forms, they are essentially a new twist on the old idea that, through manipulation of the trust structure, the taxpayer can use a backdoor method to maintain some control over the trust and avoid taxes. The basic (but false) premise of the 643(b) scam is that income allocated to the corpus (principal) of the trust is not subject to taxation. Promoters create a trust structure, often referred to with terms like Nongrantor, irrevocable, and complex. The taxpayer transfers assets such as a business, real estate, or other income-producing assets into the trust in exchange for a promissory note. The trust then leases the assets back to the taxpayer, an arrangement that makes it seem like the income generated by the assets is not actually being distributed to the taxpayer and is thus nontaxable. The IRS explicitly rejects the validity of this arrangement in its memorandum, emphasizing that simply allocating income to the trust’s corpus does not exclude it from taxation. How to Spot a Trust Scam The IRS has made it clear that it will challenge § 643(b) trusts in all forms, so taxpayers should look out for this and other trust schemes to avoid getting caught in the government’s compliance crosshairs. As noted in the IRS memo, illegitimate trusts that misinterpret § 643 often have the guise of legitimacy and may even have legitimate-appearing promoters such as lawyers, accountants, and enrolled agents. Promotional materials may consist of a series of presentations, informational websites, documents, and legal opinions. In the case of a nongrantor, irrevocable, complex, discretionary, spendthrift trust, the trust may be described as “§ 643 compliant” or “in compliance with the I.R.C.” More generally, taxpayers should be on the lookout for these common trust scam red flags: ● Exaggerated claims. Taxes are as unavoidable as death for a reason. No legal trust strategy can entirely eliminate tax obligations. Claims about deferring taxes instead of avoiding them may sound more reasonable but could be part of the scam. ● “Secret” loopholes. While tax law is complex, it is not a secret. Legitimate strategies are based on established legal principles. Scammers also like to tell potential victims that wealthy individuals use certain trust types to avoid paying taxes. ● Terms that give an air of legitimacy. Trust schemes may reference and misuse terms such as common law or sovereign to promote trusts as beyond the legal jurisdiction of the federal government. Taxpayers in the 643(b) scam are told that they will serve as “Compliance Overseer.” ● Pressure tactics. In a classic scammer technique, trust scheme promoters may push individuals to “act quickly” to secure the “exclusive opportunity” and create a sense of urgency that pressures them into making a rash decision without fully understanding the consequences. ● Complicated and confusing structures. Trust, tax, and estate planning law are inherently complicated, but complexity can also serve to hide a scam. Multiple trusts with confusing names and structures can be a way to obfuscate the scheme’s true nature. ● Lack of transparency. Promoters may be reluctant to provide clear explanations or documentation about how the trust works, relying on anecdotal evidence or testimonials rather than facts and legal analysis. ● Similarity to known scams. Many trust scams are the taxation equivalent of “old wine in new bottles.” Learning how to spot a scheme and cross-checking a trust strategy against known scams, including those in the IRS Dirty Dozen and other public warnings, can reduce vulnerability. Above all, avoid promotions that sound too good to be true, verify the promoter’s credentials, and always seek a second opinion from an independent estate planning attorney before creating any trust. If you are considering setting up a trust, consult with a qualified estate planning attorney .

While the term fiduciary is a legal term with a rich history, it generally means someone who is legally obligated to act in another person’s best interest. Trustees, executors, and agents are examples of fiduciaries. When you select people to fill these roles in your estate plan, you are picking one or more people to make decisions in the best interests of you and your beneficiaries and in accordance with the instructions you leave. You should also choose multiple backups for each of these roles in case your first choice is unable or unwilling to act when the time comes. Understanding the basics of what each role entails and what to consider when making your choices can help ensure that your estate plan is effective. Trustee A revocable living trust is often the center of a well-designed estate plan because it is the best strategy for achieving most people’s goals. You (as the trustmaker) will usually serve as the initial trustee and continue to manage the trust’s accounts and property in the same manner that you did before the trust was created. You will appoint a successor (backup) trustee in the trust agreement to be responsible for ensuring that your wealth is managed in accordance with your wishes after your death or during your incapacity (when you can no longer manage your affairs). It is best to have a trusted person or financial institution carry out this vitally important role. Your successor trustee will control only the accounts and property owned by the trust. If you own accounts and property in your sole name—that is, not as the trustee of your trust—your successor trustee will not be able to manage those items upon your death or incapacity. You will have to rely on your financial power of attorney to give someone the authority to manage those accounts and property while you are incapacitated. When you pass away, accounts and property in your sole name without a beneficiary designation may have to go through the probate process. Probate requires your executor to step in and manage those items and ultimately distribute them to the people who have priority under state law (who may not be the people you would have chosen). This is why it is of the utmost importance to appoint the right person to be your successor trustee and to fund your living trust fully. Powers of Attorney Powers of attorney are the documents in your estate plan that appoint individuals to make decisions on your behalf if you are alive but unable to do so yourself. There are a few different types of powers of attorney, each with their own specific areas of responsibility. We can help you decide which types of powers of attorney you will need based on your current situation and future goals. Here are two common types to include in your estate plan: ● Financial Powers of Attorney Financial powers of attorney grant the fiduciary you select the ability to take financial actions on your behalf, such as purchasing life insurance or withdrawing money from your bank accounts to cover your expenses. A fiduciary who acts under the authority given in a financial power of attorney is generally called an agent . Your agent is only able to manage the accounts and property that are not owned by your trust. If an account or property is owned by the trust, it is the responsibility of the trustee to manage that item, as discussed above. You can name an individual as your agent or, in some circumstances, you can name an institution, like a trust company. While in most states your agent is permitted to charge a fee for acting as your agent under a financial power of attorney, keep in mind that trust companies generally charge higher fees and will likely not waive fees like your loved ones might. ● Healthcare Powers of Attorney and Related Documents A healthcare power of attorney allows you to name a trusted person to make or communicate your medical decisions on your behalf when you cannot do so yourself. These decisions may range from deciding what surgeon to use to whether to remove you from life support. Other documents can be used in conjunction with the healthcare power of attorney to cover specific actions that can be taken regarding your medical needs, such as making decisions about the types of care you wish to receive or who can access your medical information. Executor Your executor (called a personal representative in some states) is the person who will see your accounts and property through probate, if necessary, and carry out your wishes based on your last will and testament if you have one. Depending on your preferences, your executor may be the same person or institution as your successor trustee. Some individuals choose to name a professional as their executor. The professional is usually someone who does not stand to gain anything from the will and can be a good choice if you own a great deal of different property and accounts to be divided among many beneficiaries. In other words, the more complex your estate and distribution scheme, the more it may make sense to have a professional in charge. A professional may also make sense if you do not have someone you personally know who can serve as the executor. Family or friends may serve, but it is important to consider the amount of work involved before placing this burden on someone who has little time or experience administering the estate of someone after they pass away. Being an executor can be hard work and may have court-dictated deadlines; it is crucial to pick someone you know will be up to the job. They will probably need to hire an accountant to help sort out your taxes and a lawyer to assist in the process. If there is a dispute, then attorneys, appraisers, mediators, or other professionals will undoubtedly need to be involved. Choosing a spouse or another loved one to serve as your executor may be convenient because they may already be familiar with what you own and have an easier time ensuring that your wishes are carried out. However, because of the time involved and the nature of some accounts and property, they may not be up to the task at the time. Get in Touch with Us Today Let us help you make the process of picking your trustee, agents under powers of attorney, and executor as smooth and headache-free as possible. Once you have these choices in place, you will be able to rest easy knowing that your estate plan is in good hands no matter what life brings. Schedule a call today.

Americans are, quite literally, getting buried in debt, with nearly half expecting to pass away with outstanding debts. [1] As a general rule, a person’s debts do not go away when they die. Some types of debt, such as federal student loans, are typically forgiven upon the debtor’s death, but private loans and cosigned accounts may still be owed after the debtor has passed away. State laws also play a factor in the post death debt settlement process. While nearly half of Americans think they will pass on their debts when they die, you can take proactive steps now to protect your loved ones from inheriting or becoming responsible for your debts. If you are an estate’s executor/personal representative or have been contacted by a debt collector about a deceased family member’s debt, you should understand your rights and obligations. One Nation, Under Debt Debt is as old as civilization itself. Lending at interest can be traced back to ancient Mesopotamia and the use of promissory notes to facilitate trade. The United States has carried debt since its inception, borrowing money from domestic investors and the French government to fund the Revolutionary War. [2] Total consumer debt eclipsed $17 trillion in 2023, up from $15 trillion in 2021, according to credit reporting agency Experian. [3] The largest and most common debts include ● mortgages ($11.5 trillion in 2023), ● auto loans ($1.51 trillion), ● student loans ($1.47 trillion), ● credit cards ($1.07 trillion), and ● personal loans ($571 billion). [4] The total average individual debt balance in 2023 was $104,215, up from $101,915 in 2022 and $96,371 in 2021. [5] According to Debt.org, 73 percent of Americans die owing money. [6] The average amount of debt they die with is nearly $62,000. [7] What Happens to Your Debt when You Die You are probably familiar with the expression “buried in debt.” It might hit close to home if you are like most Americans struggling to pay off existing loan balances. However, do you know what happens to your debt when you die? The answer depends on factors that include the type of debt and the state where you live. In most cases and most states, your loved ones are not stuck with your unpaid bills because creditors are paid only from the assets (e.g., a home, car, bank accounts, investment accounts) that are (i) part of your probate estate and go through a probate court or (ii) in your revocable living trust. If you do not leave behind enough assets in your probate estate and living trust to fully cover the debts owed, creditors may have to settle for what is available. There are some exceptions to the idea that surviving family members and other heirs are not on the hook for the debt, including ● a person who cosigns on a loan; ● the spouse of a deceased person who lives in a state with community property laws (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin); and ● the spouse of a deceased person who lives in a state that requires a surviving spouse to pay certain healthcare expenses and other kinds of debt. The rules governing when a surviving spouse is responsible for paying unpaid medical bills are complex and vary by state. It is important to work with an experienced estate or trust administration attorney to ensure that your affairs are wound up correctly. Surviving spouses and adult children are frequently contacted by debt collectors attempting to collect on bills for the medical care of their deceased loved one, according to the Consumer Financial Protection Bureau. However, unless the survivor also agrees to the medical debt or is responsible under state law, they are generally not liable for the debt. Not All Debts Go Away at Death Debts not inherited by a specific individual under the exceptions described above do not just disappear, except for debts that are dischargeable by death. For example, federal student loans, including Direct Subsidized Loans, Direct Unsubsidized Loans, Direct Consolidation Loans, Federal Family Education Loans, and Federal Perkins Loans, are usually discharged when the borrower dies, as long as the loan servicer receives proof of death. [8] Private student loans are a different story. Some lenders of private (i.e., nonfederal) student loans offer a death discharge, although it is not the norm. They may come after the loan’s cosigner (if there is one) or the estate for repayment of the outstanding balance on the loan. Secured versus Unsecured Debt Determining how and when to pay a debt after the debtor has passed away and who or what may owe the debt can depend on whether the debt is secured or unsecured. ● Secured debt is backed by collateral (a tangible asset the lender can repossess or sell if the borrower does not pay back the debt). Common examples of secured debt are mortgages (secured by the real property) and car loans (secured by the vehicle). Secured debts are typically paid off before unsecured debts when a probate estate is settled during the probate process. If estate assets are insufficient to cover the secured debt, the lender can seize the collateral to recoup their losses. In rare cases and under select jurisdictions, legal protections may be available for surviving spouses who wish to remain in a primary residence subject to a creditor’s claim. These protections may delay or prevent foreclosure if the spouse cannot pay off the mortgage in full. ● Unsecured debt is not backed by collateral (that is, there is no specific asset backing the debt). Unsecured debt includes credit card debt and personal loans. Unsecured creditors have lower priority than secured creditors in probate. If the probate estate has enough funds, unsecured debts are paid off before any inheritance is distributed. However, if the estate lacks sufficient funds to satisfy all its debts, unsecured creditors are typically last in line for repayment and may not receive the full amount they are owed. Funeral expenses also take priority over some creditor claims. Any state and federal taxes that the decedent owes, as well as probate estate administration expenses incurred during probate (e.g., legal and accounting fees), may also supersede creditors. Knowing which debts have priority over others in probate is the responsibility of the estate’s executor/personal representative. If the individual assigned this role in an estate plan does not follow state probate laws, they could be personally responsible for debts that should have been paid but were not because the executor did not pay creditors in the correct order. How to Plan for Debt and Leave More Money for Your Loved Ones “You can’t take it with you” applies to what you owe every bit as much as what you own. Your outstanding debt could create potential complications for loved ones. Your family may not personally get stuck with your unpaid bills; however, if you do not pay off your debts before you pass away, they may be forced to deal with debt collectors harassing or contacting them. Worse still, there may not be any money or property left to distribute to your loved ones in probate court or through the trust after everything has been liquidated to pay creditors. Here are some protections that your loved ones are afforded: ● State and federal law limits whom debt collectors are authorized to contact—and how they can contact them—to discuss outstanding debts. Spouses and other survivors should not automatically assume that they have to pay and should delay any conversation regarding payments of outstanding debts until they have discussed the specific circumstances with a lawyer. Collectors who go too far or provide misleading information can face potential consequences. ● When a beneficiary inherits a home, they also take possession of the home subject to any outstanding mortgage and are ultimately responsible for that debt. Anyone inheriting a home or other significant asset, such as a vehicle, with an outstanding loan balance must know their obligations to the lender. They may have to sell the house to pay off the mortgage or apply to transfer the mortgage to their name. In addition, individuals have the right to refuse a gift from an estate if they do not want or cannot afford it. In some cases, federal law will allow a decedent’s heirs to assume the mortgage on a property without triggering a due-on-sale clause, ensuring that the loan remains in place after the owner’s death. ● Every state has different laws and procedures surrounding debt repayment. Things can quickly get complicated, so it is best to work with a local estate or trust administration lawyer if there are any concerns about how unresolved debts could affect the surviving family. Estate planning is about the legacy that you leave behind. If that legacy includes debt, an estate planning attorney can offer advice for getting it under control during your lifetime or help your family deal with the consequences of your debts after death. Call us if you need assistance planning for your debt or winding up a loved one’s affairs. [1] Myles Ma, SPFC, 46% of Americans expect to pass on debt to their loved ones when they die, Policygenius (Jan. 9, 2024), https://www.policygenius.com/life-insurance/2024-financial-planning-survey-passing-on-debt-after-death. [2] FiscalData, https://fiscaldata.treasury.gov/americas-finance-guide/national-debt. [3] Chris Horymski, Experian Study: Average U.S. Consumer Debt and Statistics, Experian (Feb. 14, 2024), https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/#s3. [4] Id. [5] Id. [6] Bill Fay, What Happens When People Die with Debt: Who Pays? (May 16, 2023), https://www.debt.org/family/people-are-dying-in-debt. [7] Id. [8] FederalStudentAid, https://studentaid.gov/manage-loans/forgiveness-cancellation/death.

When starting a business, one of the most critical decisions you'll face is choosing your business structure. While many entrepreneurs automatically gravitate toward forming an LLC (Limited Liability Company), this one-size-fits-all approach might not be optimal for your specific situation. Your choice of entity will affect everything from your tax obligations and personal liability to your ability to raise capital and plan for succession. Making the wrong choice could expose you to unnecessary risks or burden you with excessive taxes and administrative requirements.  Understanding Tax Implications Across Different Structures Each business structure comes with distinct tax treatment that can significantly impact your bottom line. As a sole proprietor, for instance, all business income passes through to your personal tax return, where you'll pay both income tax and self-employment taxes on your earnings. While this arrangement offers simplicity, it could come with an increased audit risk . An LLC offers more flexibility in tax treatment than just defaulting to sole proprietorship/pass-through treatment. A single-member LLC can be taxed as a sole proprietorship, while multi-member LLCs can be taxed as partnerships. However, an often-overlooked option is electing to have your LLC taxed as an S Corporation, which can provide significant tax savings once your business reaches around $60,000 in annual revenue. With S Corporation tax treatment, you only pay payroll taxes on your actual salary, not on your profit distributions, potentially saving around 15% in payroll taxes on those distributions. One crucial consideration with S Corporation tax treatment is the requirement for "reasonable compensation." The IRS requires S Corporation owners to pay themselves a reasonable salary for their services before taking profit distributions. What constitutes reasonable compensation can be subjective, however, and getting it wrong could result in serious consequences, including reclassification of all distributions as wages subject to employment taxes, plus potential penalties of up to 100%. Beyond Basic Liability Protection While liability protection is often the primary reason entrepreneurs choose to form an LLC or corporation, each structure offers different levels and types of protection. Professional corporations (PCs), for instance, can offer specialized protection for licensed professionals like doctors, lawyers, and accountants. Series LLCs allow real estate investors or entrepreneurs with multiple business lines to create separate "series" within one legal entity, each with its own liability shield. C Corporations, despite their reputation for complex administration and double taxation, can offer unique advantages for businesses generating significant profits because a C Corporation structure allows for sophisticated planning opportunities (the nature of which is outside the scope of this article but book a call with me to learn more). The current corporate tax rate of 21% can also be advantageous for businesses reinvesting profits back into growth. However, C Corporations do face the challenge of double taxation, where profits are taxed first at the corporate level and then again when distributed to shareholders as dividends. This is why many smaller businesses opt for pass-through entities like S Corporations or LLCs, where profits are only taxed once at the individual level. Making Your Decision with Growth in Mind When choosing your business structure, consider not just where your business is today, but where you want it to be in five or ten years. Will you want to bring in outside investors? Are you building a business to sell or creating a legacy to pass down? Do you plan to expand internationally? These future plans should heavily influence your choice of entity today. For example, if you're planning to seek venture capital funding, a C Corporation might be more appropriate despite its higher administrative complexity. Venture capitalists typically prefer C Corporations due to their flexible stock structure and familiar operating requirements. Or if you're a solo professional service provider expecting steady growth, an S Corporation election could offer better long-term tax advantages than a simple LLC. Remember too, that certain structures have specific requirements that might affect your future flexibility. S Corporations must meet several criteria, including: ● Having no more than 100 shareholders ● All shareholders must be U.S. citizens or permanent residents ● Can maintain only one class of stock ● Must be a U.S. corporation ● All shareholders must consent in writing to the S Corporation election ● Shareholders must be individuals, estates, or certain qualified trusts Additionally, consider the administrative burden each structure requires. While sole proprietorships and partnerships offer simplicity in formation and operation, corporations and S Corporations require more rigorous record-keeping, regular meetings, and documentation. Factor in these ongoing requirements when making your choice, as they represent both time and monetary costs to your business. Finally, to maximize the benefits of the right business structure for your business, make your decision with your eyes wide open - educated about and aware of all available options. The stakes are too high to go at it alone; you need a knowledgeable, trusted advisor on your side. Book a call here to learn more and get started today.