Hooper Law Office Estate Planning Blog

Tuesday, May 04, 2010

Working Smarter

Atttorney Carissa Giebel's column this week in the Green Bay Press Gazette encourages business owners to work smarter, not necessarily harder, to prepare for the day when they are ready to sell or transfer their business. She writes:

I suggest that every action you take to exploit new opportunities or every cut you make to create a leaner and meaner company, that you do so while asking: How does this action get me any closer to my goal of leaving when I want, for the amount of money I want, and leaving the company to the successor I choose?

Create manageable goals for your exit. Create a list of small action steps for each goal with deadlines. Choose an advisor to help you create a roadmap and to hold you accountable. Give serious thought to working on, not in, your business so you can leave the way you want and when you want.

Keep an eye out for our columns every other Tuesday in the business section of the Green Bay Press Gazette.

Friday, April 23, 2010

How Much Cash Will You Need From the Sale of Your Business?

How much cash will you need from the sale of your business to enjoy a financially secure post-business life? Most business owners do not know the answer. We recommend you work closely with a financial advisor to set a realistic assumption for a rate of return on your investments. It's important to understand the life expectancy numbers for you and your spouse, and to establish a post-exit annual income amount to determine what you will need to enjoy the retirement you deserve. Attorney Carissa Giebel wrote a column in the Green Bay Press Gazette this week on this topic. She writes:

As a business owner, your "resources" are both in the business and outside of it. You need to know the value of each so you can then determine if there is a gap between the amount of money you will need in the future and what you have today. This gap must be quantified, and you must create and implement a plan to close that gap. Most owners use an experienced financial planner to help with this project.

Exit planning takes time if a business owner wants to leave on their own terms. This planning process begins when owners understand their ultimate objectives and what they have to do to reach them.

If you subscribe to the Green Bay Press Gazette, check out the full column in the business section. Otherwise, you can view it on the Green Bay Press Gazette website. Check out the guest columns from Attorney Carissa Giebel and Attorney Peter Osman every other Tuesday in the business section on various exit planning strategies.

Thursday, April 22, 2010

Facebook

Social media is moving fast and is coming up with new applications and creative uses every day. It's now become a word-of-mouth about  people and organizations. It's designed to allow people to talk and interact with you so they can connect with you. We want to connect with you. So if you have a facebook account, become a fan of our Hooper Law Office page.

Friday, April 16, 2010

Planning for Farmers Lunch and Learn

On Wednesday, we had our Planning for Farmers Lunch and Learn for advisors. Once a month, we offer an hour long education opportunity for advisors to hone in on some up-to-date topics and earn one CFP credit. This week was quite a success. The room was filled with advisors interested in reaching out to farmers who need to start thinking about their succession and transition planning. Most farmers are not aware of the planning necessary for a successful transition, and it's up to their professional advisors to make the farmers aware of the planning that needs to be done in order to pass the farm on under their own terms.

We discussed the importance of understanding the farming process. Farmers want to work with someone who knows the different issuese facing their farm operation. It's also important to relate to the emotional issues that farmers face when talking about leaving their farm. Don't be a salesman. Be an advisor teaching the farmer about their options and the various strategies they need to start thinking about. Make yourself available when the farmers are available.

We looked at a Farm Succession/'Transition Planning Wheel that included the following levels:

Essential Planning Strategies: Health Care Directives, HIPAAs, Disability Trusts, Powers of Attorneys, Living Trusts to Avoid Probate, Wills, Adequate Insurance Protection, and Funding

Common Advance Strategies: Charitable Remainder Trusts, Divorce & Asset Protection for Children, Divorce & Asset Protection for Grandchildren, Gift Trusts, Family Limited Partnerships, Estate Plan Analysis by a Design Team, Gifting Powers of Attorney, and Operating Companies (LLCs, Partnerships & Corporations).

For a copy of this planning wheel, email Carissa Giebel at carissa@hooperlawoffice.com. We hope to see you at our next Lunch and Learn session on Deferred Compensation May 19, 2010 at 12:00pm.

Tuesday, April 06, 2010

SBA Rule Changes Make Exit Possible for More Owners

Owners of closely held businesses face many potential challenges to successfully exiting their business and transitioning it to a new owner.  One common hurdle that they must overcome is finding a buyer capable of securing adequate acquisition financing for a business where much of the value is in the "goodwill" of the company.  Recent changes to the Small Business Administration's 7(A) loan program should help to alleviate this problem for many owners.  Attorney Peter Osman wrote a column on this topic for today's issue of the Green Bay Press Gazette, writing that:

  "Under new rules, any amount of goodwill (up to the overall lending limit of $2 million) may be financed so long as there is at least 25 percent equity provided in any combination of borrower down payment and seller stand-by financing.  In addition, the SBA has temporarily increased its guarantee from 75 percent to 90 percent of the loan amount, and has waived the guarantee fee charged to borrowers.  In a nutshell, the new rules make acquisition financing easier for borrowers, provide clarity and additional security for lenders, and significantly increase availability of SBA financing at a time when it is needed more than ever."

There are many other factors that must be in place in order for a business owner to succesfully complete their exit, but those who have taken the time to plan their exit will be well situated to take advantage of these favorable changes.

If you subscribe to the Press Gazette or have a chance to pick up a copy on your way home tonight, look for the entire article in the Business section.  If not, you can view the entire article online at the Green Bay Press Gazette website.  Don't forget to look for future guest columns from our office in the Press Gazette, appearing on Tuesdays on a bi-weekly basis.