Understanding these challenges now can help you better prepare, whether you're creating your estate plan or considering serving as an estate executor. 

But first, a note about terminology. If someone creates a will, the term used for the person who handles the estate is “executor.” If someone creates a trust, the person who handles the estate is called a “trustee.”

When someone becomes incapacitated, the person who handles financial matters is the holder of power of attorney. The jobs are similar but not identical. In this article, we’ll focus on the role of an executor, who is carrying out the wishes of someone who died under the terms of their will. However, if you’d like more information about what a trustee does, book a call with me using the link below.

Let’s get to it.

In this blog article, I want to help you understand your options beyond conventional bank financing and guide you toward solutions that support your business goals while protecting your interests.

UNDERSTANDING TODAY'S LENDING LANDSCAPE

The traditional lending environment has shifted dramatically in recent years. Banks have become increasingly risk-averse, implementing stricter lending criteria that often disadvantage smaller businesses. This cautious approach means even profitable companies with solid business plans may be unable to secure traditional financing.

This shift isn't just about stricter credit requirements. Banks now require more extensive documentation, longer operating histories, and higher collateral requirements than ever before. These hurdles can seem insurmountable for many growing businesses, especially when you need capital quickly to seize time-sensitive opportunities.

I'm talking about estate planning—specifically, Life & Legacy Planning—the ultimate love letter to the people you care about most.

A DIFFERENT KIND OF LOVE LETTER

Love isn't just about grand gestures or perfectly curated date nights. The deepest expressions of love are often found in the quiet, intentional actions we take to care for and protect the people we cherish.

And while estate planning might not seem romantic at first glance, I’d argue it’s one of the most loving things you can do.

Think about it—when you create an estate plan, you’re writing a love letter that says:

"I care about you so much that I’ve taken the time to make sure that when I'm gone, you know what to do, you know how to find what I've left behind and make sure it's easy to transfer to you, and I've left you the support so you don't have to go it alone."

Without this crucial step, you could face a devastating scenario: paying out of pocket for significant damage because your insurance claim was denied. Let's explore how to ensure your trust and insurance work together to protect your most valuable asset.

THE HIDDEN RISK OF TRUST OWNERSHIP

When you transfer your home into a trust, you change its legal ownership structure. While you might still live in the home and act as the trustee, depending on how your trust is structured, the trust becomes the legal owner of the property. If your trust is a revocable trust, this change of title won’t impact your taxes because you are still the owner for all tax purposes, but this title change could give your homeowner’s insurance company a reason to deny your claim. And, whether that denial turns out to be valid or not, or could be contested in a court proceeding against the insurance carrier, you don’t want to have to deal with any of that. 

Insurance companies base their coverage decisions on legal ownership. If there's a mismatch between the property's legal owner and the named insured on your policy, the insurer might deny your claim. Imagine discovering after a major fire that your insurance company denies your claim because your policy doesn't reflect your trust ownership. This nightmare scenario happens more often than you might think, but it's easily avoidable with proper planning.

Your choice of entity will affect everything from your tax obligations and personal liability to your ability to raise capital and plan for succession. Making the wrong choice could expose you to unnecessary risks or burden you with excessive taxes and administrative requirements.

UNDERSTANDING TAX IMPLICATIONS ACROSS DIFFERENT STRUCTURES

Each business structure comes with distinct tax treatment that can significantly impact your bottom line. As a sole proprietor, for instance, all business income passes through to your personal tax return, where you'll pay both income tax and self-employment taxes on your earnings. While this arrangement offers simplicity, it could come with an increased audit risk.

An LLC offers more flexibility in tax treatment than just defaulting to sole proprietorship/pass-through treatment. A single-member LLC can be taxed as a sole proprietorship, while multi-member LLCs can be taxed as partnerships. However, an often-overlooked option is electing to have your LLC taxed as an S Corporation, which can provide significant tax savings once your business reaches around $60,000 in annual revenue.

In this blog article, we will walk you through how to prepare for evacuation, manage an emergency, and recover afterward. We'll also explain how estate planning can safeguard your loved ones’ future, even in the most challenging times. Let’s get started so you can learn how to protect what matters most.

PACKING SMART WHEN TIME IS TIGHT

Imagine the type of emergency in which you have just 15 minutes to leave your home. What would you grab? It’s a scenario no one wants to face, but planning ahead can turn chaos into action. And, as we’re seeing with the hurricane that hit Asheville unexpectedly and the wildfires in Los Angeles, this is a scenario we all need to be ready for, and the time to plan is right now.

Start by packing a go-bag with the essentials you’d need if you had to leave in a hurry. Include chargers for your devices, as well as critical medical items like prescriptions, hearing aids, and oxygen if you or a loved one relies on them. Don’t forget your pets! 

This is called a single-member LLC (“SMLLC”). Many entrepreneurs form SMLLCs believing they've created an impenetrable wall between their personal and business assets, only to discover too late that this shield has significant vulnerabilities. Let's explore why your SMLLC might not provide the protection you think it does and what you can do about it.

KNOW THE BOUNDARIES BETWEEN YOU AND YOUR BUSINESS

The idea behind an LLC is that it creates a legal wall between your personal finances and your business. If someone sues your business or a creditor comes after it, your personal assets—like your home or savings—should, in theory, stay safe. But that wall, often called the “corporate veil,” can fail if you don’t maintain your LLC properly.

With the new year in motion, it's time to stop pushing those thoughts aside and take action to protect the people you love most. Many people avoid estate planning because they think it will be complicated, expensive, too time-consuming, or emotionally challenging. But the truth is, not having a plan, or having an out-of-date plan, is far more costly – financially,  emotionally, and time-wise – for the people you love.

Let's take a look at five things you can do right now to create lasting peace of mind.

STEP 1: GET FINANCIALLY ORGANIZED

One of the biggest challenges people face after losing a loved one is trying to piece together their financial life. Where are all the accounts? What insurance policies exist? What bills need to be paid? Without proper organization, your family could spend months or even years trying to track everything down. Worse yet, anything they don’t find will be turned over to the State Department of Unclaimed Property, where there are approximately $60 billion in lost assets nationwide.  

But here's the truth: cutting corners with DIY legal documents can lead to serious consequences that could cost you much more in the long run. DIY documents often fail to cover all the necessary bases, from missing crucial legal protections to exposing yourself to legal liabilities. And, when they fail, the cost is far higher than the cost of working with a lawyer who will counsel you, prepare documents for you that meet your specific needs, and be there for you when a conflict or dispute arises.

Let’s dive into why you should think twice before relying on these shortcuts for your business and why it’s a wise investment to work with a trusted advisor.

1 | OMITTING CRUCIAL LEGAL PROTECTIONS

When you use a DIY legal document, you’re relying on a generic template that might not consider your business's unique needs. Legal documents are not one-size-fits-all. Each business has specific risks and requirements that must be addressed, and using a standard template leaves you exposed. 

In this second installment of a two-part Q & A series, I’ll break down the key differences between your primary estate planning options and explore practical ways to ensure your family is protected, no matter what the future holds. So, let’s dive in, beginning with a question about the basic estate planning documents.

Q: WHAT IS THE DIFFERENCE BETWEEN A WILL, LIVING TRUST, AND DYING INTESTATE? AND WHAT DOES THAT MEAN, PRACTICALLY SPEAKING?

A: If you die without an estate plan, you do have a plan - it’s just the plan chosen for you by the state, and you may not like it. Almost certainly, your loved ones won’t like it because it means they’ll likely need to deal with a court process called “probate.” When you die without a will, it’s called dying “ intestate,” and it means that your assets are distributed according to state law after a process in which a judge decides who gets what. This could mean your assets would not go to the people you choose in the way you choose, and your family could face a lengthy, expensive, and public court process during an already difficult time.