Posts tagged ‘small business’
‘nest egg’ planning – an important end-of-year goal
The end-of-the-year rush is in full swing. You’re busy shopping for holiday gifts, planning and attending gatherings with family and friends and (hopefully) simply enjoying the magic of the season . . . so why make time in the midst of all this to think about your nest egg?
Because it’s the *ideal* time to focus on the simple steps to take to properly preserve and protect your nest egg. You can chart a course, follow it (at whatever pace YOU choose) and in the process check off some very important items from your to-do list. The bottom line: the greatest gift you can give your family is to put an organized and thoughtful estate plan into place – one that protects your nest egg.
We’ll go through the steps incrementally, starting out with the first seven estate planning items on the checklist. (My next post will cover insurance planning, which ties in directly to a thoughtful estate plan for most people.)
- Make (or update) your will document. If you don’t already have a will document, now is the time to put one in place. This isn’t a complicated or expensive task. I’ve written previously about why everyone should have a will – check out these posts for more information HERE and HERE. And if you already have a will, you should review it on an annual basis to make sure that it continues to carry out your wishes. Obviously, if you’ve had a change in life circumstances in 2010 – marriage, divorce, new child, etc. – then a review of your will is imperative.
- Create (or update) your powers of attorney and living will. Everyone should have two powers of attorney in place, if you reside in Tennessee: a general durable power of attorney and a power of attorney for healthcare. With these two documents, your family will be able to manage your affairs in the event you’re disabled. Without these documents, a conservatorship may be necessary – go here to read my article on this topic. And as with your will documents, the powers of attorney should be reviewed annually – make sure that the people you’ve designated are still appropriate for this position. As well, terms for the documents do change, so check with your estate planning attorney to see if your documents require substantive revision. A living will sets out your end-of-life health care preferences and is important information for health care providers and your family.
- Create a letter of instruction. This letter goes hand-in-hand with your will and powers of attorney documents. In this letter, you provide invaluable information to your heirs: where important documents are located, where your financial accounts are located, special burial wishes, and the like. I’ve written before about compiling this information for your heirs – you can read this article here.
- Calculate (or review) your net worth. The amount of your estate – e.g. the value of all of your assets – determines in large part what kind of estate planning you can/should do to protect your nest egg for your heirs. You should review your net worth annually and consult with your tax and/or estate planning advisors to determine if your plan requires any substantive changes in order to achieve your goals.
- Consider creation of a trust. Your annual review of net worth may lead to a recommendation that you establish a trust – either living (created and funded in the present) or testamentary (created and funded following your death). A trust often can be an effective vehicle for transferring wealth and protecting assets.
- Consider funeral pre-planning. This is a simple step to take, and can save cost and time for your family. It’s as simple as contacting local funeral homes and requesting pre-planning information.
- Arrange for the orderly transfer of business assets. If you are a small business owner, planning for the smooth operation (or sale) of your business in your absence requires more than a simple reference in your will document. Your entity documents (or legal agreements with business partners) should address what happens to the business upon death, and should be reviewed annually to confirm that the plan continues to meet such goals. As well, you should consider the purchase of life insurance as a vehicle for funding the transfer of business assets at death.
Take the above steps, one-at-a-time and at your own pace. But just do it. In my next post, I’ll add a few more to-do items to the list. And in the meantime, feel free to call (615.595.7776) or email (cnm@csquaredlaw.com) if you have question about your year-end planning.
As I write this post, my satellite weather station reports the temperature at 19 degrees, with a ‘feels like’ temperature of six degrees. I hope you’re staying warm and enjoying this holiday season!
With *warm* regards,
Caitlin Moon
tech for business part II: try a *VIRTUAL* assistant
One of the biggest technology-driven trends for small businesses is the utilization of virtual assistants. This model of employment offers great flexibility to business owners who require specific help that can be accomplished from a remote location. What kind of help? A virtual assistant can provide administrative, technical, and/or creative (social) assistance to clients from his/her office (which is usually home-based). This truly is an innovation for a number of reasons.
So what does this mean? A virtual assistant can answer your business telephone – from anywhere. A virtual assistant can handle all of your invoicing – from anywhere. A virtual assistant can manage your information technology – from anywhere.
A primary benefit to the small business: you buy only the time you need from the virtual assistant, and the assistant generally can be paid as an independent contractor. (Side note: you should always confirm with your tax advisor how any person you pay for work should be classified – this is a case-by-case evaluation.) If you need only a certain number of hours per week devoted to a specific task, you can realize a tremendous savings through the use of a virtual assistant.
As well, combining the use of a virtual assistant with certain SaaS services (such as online accounting or a shared workspace) streamlines the work process and thus can streamline your overhead. Click HERE to learn more about virtual assistants and how to utilize one in your business.
Of course, you must treat a virtual assistant just as you would a traditional one, in terms of work-related expectations. As with any other person who performs work on behalf of your business, a virtual assistant should be provided with written parameters that set forth your expectations. Using a virtual assistant may require an update to your employee manual, as well.
NOTE: The above first appeared in the November 2010 edition of BRIGHT IDEAS, C²Law’s e-newsletter for business owners. To view the entire newsletter, click HERE. To subscribe to BRIGHT IDEAS, click HERE. We publish monthly, and promise to provide useful and timely information in a brief format. We don’t like receiving junk mail, so we don’t send it.
