If you are a partner in a small business you may have invested a great deal in the business over the years. For this reason your stake in the business could be your most valuable asset, but of course it would not be in liquid form. So when you’re planning your estate the matter is a bit challenging because it is likely you would want to spread the value of the business among multiple heirs.
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Parman & Easterday are members of the American Academy of Estate Planning Attorneys.

Estate planning is not a one-size-fits-all endeavor, and this is one of the reasons why it is so important to engage the services of an estate planning attorney. There are those who feel as though all you have to do is draw up a last will and you are finished.   There are websites on the Internet that would have you believe that doing so is as simple as filling in the blanks on a generic template. But the reality is that each individual is different, each situation is different, and each family is different. Thinking you can fit into a one size fits all estate plan is a mistake. Estate planning attorneys provide you with personalized service tailored to your specific needs.  Do-it-yourself websites fail to tell you that.

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Parman & Easterday are members of the American Academy of Estate Planning Attorneys.

When you work for someone else throughout your career estate planning can be challenging, but when you are part owner of a small business there are additional factors to consider. For one thing, if one of your partners was to pass away it is unlikely that his or her heirs will be able to step in and immediately fill that role without missing a beat. Read more…

Parman & Easterday are members of the American Academy of Estate Planning Attorneys.

The federal Small Business Administration (SBA) provides essential financial support in the way of loans to small businesses throughout Kansas, Missouri and Oklahoma. Small businesses of all types rely on these loans for business expansion or even for daily operating expenses. An important part of financial planning done by small businesses is keeping abreast of the latest changes in SBA rules and procedures.

SBA Size Criteria

As helpful as SBA loans are, especially in these tough economic times, small businesses must qualify for these loans by meeting eligibility guidelines. Size characteristics in terms of revenue or number of employees are key components of these eligibility criteria. The SBA defines size criteria as maximum values for eligibility; that is, in order to qualify for SBA programs a business must be below the specified size criteria.

The SBA defines individual size criteria for different types of businesses based upon their 4-digit North American Industry Classification System (NAICS) codes.

The Role of Inflation

Any businessperson recognizes the impact of inflation on the profitability and gross revenue of a business. Inflation automatically affects any SBA size criteria based upon dollars of income, potentially making certain businesses ineligible for SBA programs. The SBA acknowledged the role of inflation by adjusting the dollar limits upward in 2008. This action restored the dollar limits to be on an inflation-adjusted par with prior values.

Current Adjustments

On September 10, 2010, the SBA published a new round of size criteria specifically for the retail trade (NAICS Sector 44-45, Retail Trade). The SBA is conducting a general readjustment of all size criteria, both dollar limits and number of employees, based upon current industry analyses. The goal of the SBA is to complete all size adjustments by industry code within the next two years and allow more small businesses to qualify for SBA support.

With the new limits “retail trade” small businesses that did not qualify for SBA programs may now be eligible. Businesses with other industry codes should watch for future size limit changes which may affect their eligibility.

Larry Parman
Attorney at Law

Parman & Easterday are members of the American Academy of Estate Planning Attorneys.

Do you own your own business? If so, you should have a plan for your business after your death or in case you become disabled. There are three documents which can help you include your company in your estate plan.

Financial Power of Attorney

A financial power of attorney (POA) is an instrument that allows you to name someone to control your financial assets when you are unavailable. It’s important your POA qualify as a “durable” POA. Having the POA created as a durable POA is important because that means it stays in effect beyond the point when you are determined to be disabled.

Then the question is when your POA comes into effect. Your POA can be either “springing” or “immediate.” If it is immediate, then the financial agent you appoint as your POA can exercise their power on your behalf at any time, even while you are still alive and well. In that case, the durable financial power of attorney may be used to allow your spouse or a family member to sign on your behalf if you are temporarily unavailable.

If you wish to keep your business and financial interest solely in your control, a “springing” financial power of attorney will not go into effect until a doctor – or sometimes two – says you are mentally or physically unable to control your own assets. Only then will your financial agent have control of your finances and business, and that person must use them for your benefit.

Last Will and Testament

In your Last Will and Testament you can name someone to take over your company upon your death, or you can state other arrangements to be made. You cannot use your Will to designate an agent to take over if you should become incapacitated. That’s what the POA is for.

Discuss with your family what their wishes are for your business after your death. If someone wants to take over, name them in your Will. If no one is available to run your company, you can make provisions for your business to be sold after you die. The downside to using a Will for business estate planning is that a prolonged probate process may damage your business as it waits for a final verdict on its future.

Revocable Living Trust

A Living Trust is a great asset to your estate both while you are alive and after your death. If you decide to use a Trust for your estate plan, you can include terms for the management and continuity of your business interests. By doing so, you are giving your Trustee the ability to run your company in the event of your incapacitation or death. A Trust can help your company maintain stability and continue to provide a source of income to your loved ones until the matter of your estate can be sorted out. As with a Will, you must determine if someone will take over the company or if it will be sold. The good news is, a Trust lets both options happen smoothly and quite often without probate in court.

Larry Parman
Attorney at Law

Parman & Easterday are members of the American Academy of Estate Planning Attorneys.