A Bright Future: How Transferring Ownership to a Key Employee Can Benefit Your Business and Your Legacy
As a business owner, you’ve worked hard to build your company into a successful enterprise. However, you may not always be able to run your business, and you may be considering transferring ownership to a key employee. Creating a succession plan that involves transferring the business to a key employee can be a complex process, but it can also ensure that your company continues to thrive long after you retire. In this post, we’ll discuss how to create a succession plan that transfers the business to a key employee and how our firm can assist.
Identify Your Goals and Objectives
The first step in creating a succession plan is to identify your goals and objectives. What do you hope to achieve through the transfer of ownership to a key employee? Do you want to ensure that your business continues to thrive after you retire? Are you looking for a way to reward your key employee for their loyalty and hard work? Understanding your goals and objectives will help you create a plan that meets your needs.
Select a Key Employee
The next step is to identify the key employee who will take over your business. This is a critical decision, as you will be entrusting the future of your company to this person. You want to select someone who has the skills, experience, and motivation to successfully run your business. Once you have identified your key employee, you will need to start training them to take over your duties and responsibilities.
Create a Succession Plan
Transferring ownership of a business to a key employee is a critical step in ensuring the long-term success of the company. There are several tools available to make this process smoother, including phantom stock agreements, stock option plans, employee stock ownership plans (ESOPs), and various forms of deferred compensation.
A phantom stock agreement is a contractual agreement that gives an employee the economic benefits of ownership without actually transferring ownership. The employee receives a share of the company's future profits, which is equivalent to the value of a share of stock. This allows the employee to benefit from the success of the company, without actually owning any of it.
Stock option plans provide the key employee with the option to purchase a certain number of shares of the company's stock at a fixed price. This allows the employee to share in the future growth of the company.
ESOPs are a tax-advantaged way of transferring ownership to employees. They allow employees to purchase stock in the company through a trust, which then holds the stock for their benefit. This allows the employees to share in the ownership and profits of the company, while also providing tax benefits to the employer.
Deferred compensation plans are a way of deferring a portion of the key employee's compensation until a later date. This can be a powerful incentive for the employee to remain with the company and work towards its long-term success.
How Our Firm Can Help
Creating a succession plan can be a complex process, and our firm is here to help. We can provide expert advice on all aspects of succession planning, from selecting a key employee to creating a transfer agreement. Our team can help you navigate the legal and tax considerations involved in transferring ownership, and we can work with you to create a plan that meets your unique needs and objectives.
The Contractor's Secret Weapon: How to Use Construction Liens to Get Paid
Construction projects can be complicated, and sometimes payment disputes can arise between contractors, subcontractors, and property owners. When a payment dispute occurs, one way to potentially recover the money owed to you is by filing a construction lien.
A construction lien, also known as a mechanic's lien, is a legal claim that can be placed on a property by a contractor or supplier who has provided work or materials for the property. The lien serves as a security interest in the property and gives the lien holder the right to force a sale of the property to recover payment for the work or materials provided.
Filing a construction lien can be an effective way to motivate a property owner to pay what is owed. It can also provide leverage for negotiating a payment plan or settlement.
However, it's important to note that there are strict rules and deadlines for filing a construction lien. If you don't follow the rules correctly, you risk losing your right to file a lien and recover payment.
If you're a contractor or supplier and are owed payment for work or materials provided, a construction lien may be a viable option for recovering payment. However, it's important to understand the rules and procedures for filing a lien, and to work with an experienced attorney who can guide you through the process.
Revocable Transfer on Death Deeds: The Low-Stress Way to Pass On Real Property
Estate planning is an essential part of protecting your assets and ensuring that your loved ones are taken care of after you're gone. While many people focus on creating a will or trust, there's another important document that shouldn't be overlooked: the revocable transfer on death (TOD) deed.
A revocable TOD deed is a legal document that allows you to transfer ownership of real property to a named beneficiary after your death. This type of deed is revocable, which means that you can change your mind about the beneficiary or the property at any time during your lifetime.
One of the primary benefits of using a revocable TOD deed is that it allows you to transfer real property outside of probate. This means that the property can be transferred to the beneficiary quickly and efficiently, without the need for court intervention. In fact, a revocable TOD deed allows you to transfer real property to a specific beneficiary or multiple beneficiaries, or even transfer it to a living trust, which can equipped with specific instructions on how the property should be treated once it’s held in that trust.
In Nebraska, a revocable TOD deed is available as a legal option for transferring real property. However, it's important to note that not all states allow this type of deed. If you're interested in using a revocable TOD deed as part of your estate plan, it's important to consult with an experienced estate planning attorney who can advise you on the laws in your state.
It's important to note that a revocable TOD deed is not a substitute for a comprehensive estate plan. However, it can be a valuable addition to your plan, particularly if you own real property that you want to transfer outside of probate.
If you're interested in learning more about revocable TOD deeds and how they can benefit your estate plan, contact an experienced estate planning attorney. At our firm, we specialize in helping our clients create customized estate plans that reflect their unique needs and goals. Contact us today to schedule a consultation and take the first step toward protecting your future.
Should You Buy the Farm or Just the Cows? Comparing Asset and Membership Unit Purchases for LLCs
When it comes to purchasing an LLC, there are two options to consider: an asset purchase or a membership unit purchase. While both options might seem similar, there are some key differences that business owners need to be aware of before making a decision.
In an asset purchase, the buyer purchases the assets of the LLC, such as equipment, inventory, and accounts receivable. The LLC itself remains intact, and the buyer can choose which assets they want to acquire. This option allows the buyer to pick and choose what they need, and they can leave behind any unwanted liabilities.
On the other hand, a membership unit purchase involves the buyer purchasing the actual ownership interest in the LLC. This means that the buyer takes on all the assets and liabilities of the LLC, as well as any legal obligations or potential lawsuits that the LLC may face.
There are some advantages and disadvantages to both types of purchases. An asset purchase allows the buyer to avoid taking on unwanted liabilities, and it can also provide a more flexible option for buyers who are only interested in acquiring certain assets. However, it also means that the buyer has to establish a new LLC and obtain new permits and licenses.
A membership unit purchase, on the other hand, provides the buyer with an established business entity with existing permits and licenses. It also means that the buyer takes on all the assets and liabilities of the LLC, which can be a disadvantage if the LLC has significant liabilities or potential lawsuits.
Before making a decision on which type of purchase to pursue, it's important to consult with a qualified attorney who can help you navigate the legal and financial implications of each option. At our firm, we specialize in providing legal counsel to business owners, and can help you weigh the pros and cons of each option to make an informed decision.
Whether you're looking to purchase the assets of an LLC or the membership units, our experienced attorneys are here to help. Contact us today to schedule a consultation and learn more about how we can help you protect your business interests.
Why Trusting Online Agreements Could be a Costly Mistake
As an attorney who's represented small businesses for the last 14 years, I've seen it all. From the startup founder who thinks they can save a few bucks by using a free online agreement template, to the established business owner who's been burned by a bad deal they found on the internet, I've seen firsthand the risks of relying on online agreements.
Sure, the convenience of these free templates might be tempting, but when it comes to protecting your business interests, you want to make sure you're doing it right. The problem with using free online agreements is that they're often generic, and may not reflect the specific needs and requirements of your business. They might not be legally binding, or they might not hold up in court.
In the worst-case scenario, relying on an internet agreement could result in legal disputes, costly lawsuits, or even the failure of your business. When it comes to protecting your business interests, it's worth investing in an experienced attorney who can help you develop the agreements and contracts that you need to ensure your business is protected.
At my law firm, we specialize in working with small businesses to develop customized legal solutions that meet their unique needs. We work closely with our clients to ensure that their agreements and contracts reflect their goals, and we help them navigate the legal landscape with confidence.
So, if you're considering relying on an online agreement to save a few bucks, think twice. Investing in the right legal help can be the difference between success and failure for your business. Let us help you protect your business interests, so you can focus on what you do best.
Want to make sure your kids don't blow their inheritance on avocado toast? A living trust can help you control and manage their inheritance to pay for their education long after you're gone.
As a parent, it's only natural to want to provide for your kids long after you're gone. But let's be real, you're not exactly thrilled about the idea of them blowing their entire inheritance on a sports car, a round-the-world trip, and a lifetime supply of avocado toast. So how can you make sure your hard-earned assets are used the way you intended? Enter: the living trust.
A living trust is a legal document that outlines how your assets will be managed and distributed after your death. With a living trust, you can control and manage your children's inheritances from beyond the grave (cue spooky music).
But what are the real benefits of a living trust? Let's break it down:
Control: With a living trust, you can determine how and when your children receive their inheritance. Want to make sure they don't blow it all at once? You can set up the trust so they receive their inheritance in installments over time. Worried about them not being financially responsible? You can set conditions on when they can access their inheritance, like achieving certain life milestones or reaching a certain age.
Protection: A living trust can also protect your children's inheritance from creditors and lawsuits. If your children inherit assets outright, those assets are vulnerable to creditors and lawsuits. But with a living trust, you can set up a trust that provides protection for their inheritance. You can set up a spendthrift trust that limits your children's access to the assets and protects them from creditors.
Avoiding Probate: Probate is a court-supervised process that can be costly and time-consuming. With a living trust, you can transfer assets to your children without going through probate, which can save time and money.
Peace of Mind: Finally, a living trust can provide peace of mind knowing that your children are taken care of, even after you're gone. With a living trust, you can rest easy knowing that your children's inheritance is being used the way you intended.
So there you have it, folks. With a living trust, you can keep your kids from blowing their inheritance, protect their assets from creditors and lawsuits, avoid probate, and take advantage of tax benefits. And most importantly, you can rest in peace knowing that your hard-earned assets are being used to support your family.