Planning Tips for 2015

Are you following the best practices in your business and personal planning?

1. Protect your retirement plan.
   Many clients’ largest savings account is a pension plan accumulated over a lifetime of work. These plans are exempt from creditors during your life as long as you are a Florida resident. That protection may lapse if you move to another state. In addition, under a recent US Supreme Court ruling, the plan may not be protected when inherited by children who live outside of the State of Florida. An IRA Trust can ensure that your wishes are followed after your death and protect the IRA from your children’s creditors and potentially from divorce and other adverse outcomes.
2. Avoid Single-member LLCs.
   A single-member LLC where one individual (or potentially husband and wife) owns 100% of the company now provides no protection from creditors of the member. It is critical to diversify LLC ownership or implement other effective planning strategies before claims arise.
3. Document your business agreements.
   Many businesses involve multiple partners or shareholders without a partnership or shareholders’ agreement. This can create significant uncertainty when one partner separates from the business, retires, or passes away, or when other events arise. It is important to plan ahead with proper organizational documents.
4. Don’t hold business real estate inside of your primary business entity;
   if you own your business real estate and hold it inside of your primary operating entity, the real estate is exposed to all risks generated by the business (e.g. contract, tort and professional liability claims) and the business is exposed to the risks generated by the real estate (e.g. slip and fall and other premises liability). Consider diversifying and holding business real estate in a separate entity so that all assets are not exposed to the same claims.
5. Protect yourself from business liabilities.
   Whenever possible, just say no to personal guarantees. Routine business contracts can include hidden personal guarantees even when they aren’t signed personally. Make certain all significant contracts and agreements are reviewed before signing. This simple step can avoid significant problems in the future.
6. Consider diversifying.
   Holding business assets and different business lines in separate business entities can add protection and diversify risk.
7. Don’t acquire non-homestead real estate in your personal name.
   All real estate involves risk. Non-homestead property should be held in a properly structured business entity. Consider transferring real estate in your individual name to a newly organized entity.