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    Joshua and Laura Meier Newport Beach Trust and Estate Planning Attorneys Focused on Helping Families with Young Kids
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    Monthly Archives: September 2014

    The 4 Key Life Skills Your Children Need to Have Before They Inherit

    Inherited wealth need not be “an albatross around the neck of the children” as Sting so succinctly put it recently when asked if he was leaving his wealth to his children.

    His children will not see much of his millions, but not all wealthy parents feel the way he does.  Many a great family fortune has been built by successive generations of the same family – and many lost as well. The difference is that successful families develop skills in the next generation for respecting, protecting and growing inherited wealth. family walking

    Covie Edwards-Pitt, the author of a book called Raised Healthy, Wealthy & Wise, says there are four critical skills children must develop before they receive an inheritance from parents or a trust. She interviewed scores of successful inheritors to identify theses four skills, which are:

    The ability to earn their own money and live off what they make. Children raised with wealth feel they are the most successful when they earn enough on their own to support themselves without the family money.

    The ability to set and pursue their own work goals. Children of wealth who are encouraged to find work they enjoy are much more likely to find satisfaction in that work if they are taught that it takes time and perseverance to reach this goal and that they should focus on learning from every job and give it their best.

    The ability to develop self-worth that is separate from family wealth. Children who develop a core identity based on their own accomplishments and the choices they make in life are much happier and more successful.

    The ability to be resilient and bounce back from adversity. Family wealth can cushion many blows, but the most successful inheritors are those who were allowed to experience and navigate failure on their own.

    One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call your Newport Beach Estate Planning Attorneys today to schedule a time for us to sit down and talk about an Achieve Your Dreams Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

    Avoid These Top 10 Mistakes New Small Business Owners Make

    A New York Times article lists the top rookie mistakes entrepreneurs often make when starting a business, and with our years of experience in helping entrepreneurs capitalize on new business opportunities, many of them ring true.  Here’s the list:

    1.  Hiring a good friend or family member.  When it comes to hiring staff for your new business, competence is the most important attribute, not familiarity.

    2.  Keeping rent as low as possible.  While managing expenses is always an important part of new business start-up, choosing a location purely based on cost can be deadly for a business.  Choose a location that provides the best opportunity to generate customers.

    3.  Buying used equipment.  Sometimes this works out all right, but more often than not, you will spend more money fixing used equipment than you would have spend buying new.  Plus, it’s an added distraction that doesn’t contribute to sales.

    4.  Underpricing.  You need to price your product to make money, which is the reason you’re in business in the first place.  It starts with knowing what you need to earn and pricing in alignment with your minimum to be happy first and then increasing from there, once you clearly understand the value of your product to the marketplace. Use this tool to discover your Money Map Number:

    5.  Not spending on professional advice.  There is nothing more expensive than a cheap lawyer or CPA.  Seek out – and pay a reasonable fee—for the best possible legal and financial advice, not just for one-time, but for an ongoing relationship you can count on.  Legal and financial guidance should be a regular part of your monthly work on your business, not something you do when you think about it.

    6.  Using your personal bank for business banking.  Not every bank knows how to serve the small business customer (which means lending).  If you’ve chosen a good accountant (see above), he or she can guide you to good SMB banks in your area.

    7.  Borrowing blindly.  Sometimes using borrowed money is a good idea – like borrowing to do things right — and sometimes it is not.  You need to know the difference.

    8.  Not measuring your marketing.  You need to implement a tracking system that measures your marketing efforts; otherwise, you may be just throwing money at something that doesn’t bring customers in the door.

    9.  Treating employees too fairly.  Obviously, you need to treat your employees fairly.  But don’t compound a hiring mistake with months of indecision – your business and your profits will suffer.  Contact us to review your hiring and firing practices.

    10.  Falling in love with your product or service.  A wonderful product or service won’t make up for bad operational decisions.  It’s key to have a balance of both — a product/service you love and an operational team to support it.

    We can help you discover if you have what it takes to start your own business and guide you through the steps to successful entrepreneurship.  Whether you are new to entrepreneurship or already operating a business, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.

    Avoid These Four Common Legal Mistakes If You Own a Business

    Whether you are just starting a new business or have been running a business for years, there are four common legal mistakes that both novice and seasoned entrepreneurs make that can have a significant impact on the future viability of your company:

    Co-mingling of business and personal finances.  You may have started your business as a hobby and watched it grow into a full-scale business that now comprises a majority of your personal assets.  If you have not taken the necessary legal steps to protect your assets, you need to consider forming a legal entity like a limited liability company (LLC) or corporation to provide the proper asset protection.  Many small business owners select an LLC to gain valuable personal liability protection without the complexities of a corporation.  Choosing an LLC also makes it easier to pass ownership on to future generations or other partners.  In addition, LLCs are taxed as pass-through entities, which means business profits are not taxed separately but flow through to the owner.small business

    Lack of employment agreements.  Employers need to have written employment agreements with their employees to help them govern the relationship.  Employment agreements should specify job duties and responsibilities and set expectations for performance.

    Lack of proper business licenses.  It is not uncommon for business owners to overlook obtaining the proper local, state or federal licenses required to operate their businesses, but failure to do so can cause your company to lose its good standing and cost you in terms of fines and having your company administratively “dissolved,” which can result in the loss of personal liability protection if you operate a corporation or LLC.

    Lack of business succession planning.  If you don’t want your business to die when you do, or dissolve once you retire, then you need to put the proper plan in place to see that your business goes on without you.  This may take the form of a buy-sell agreement, a business transition plan or a business succession plan, depending on if you want to sell your business or pass it on.

    Having a business attorney who understands the individual needs and unique circumstances of your company is key to helping your business thrive and prosper.  If you are interested in learning more about legal protection strategies for your business and how we work with you as a partner in protecting your company, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.

    Why Inheriting in Trust is a Must

    You bring your children into the world with love. You raise them with love. If you’re going all the way as a parent, you also create an estate plan to safely pass on your legacy of love as well as your assets. But does your plan simply leave your assets outright, so they pass directly to your children all at once? Or are they protected via a trust?older couple

    A trust is a must if you’re looking for true protection when passing on assets. Just as you protect your children from harm while you raise them, you can also protect them from any threat that could come from irresponsible behavior or external risk. The safest choice is to place the inheritance in a trust.

    Trusts can be designed to protect assets from things like bankruptcy, creditors, lawsuits and even divorce. No one is immune from making a few mistakes during their lifetime, but that shouldn’t have to cost them their inheritance. If your child has a marriage that dissolves, for example, their future inheritance can be safely tucked into a trust, separating those assets from marital property and rendering them untouchable by an ex-spouse.

    You can also set up a trust to distribute an inheritance according to your own wishes and for specific purposes, such as education, starting a business, maintaining a family vacation home, or whatever will benefit your children the most.

    Gifting a large sum of cash to a 21-year-old is not usually considered best practice. Many parents leaving assets in trust choose to stagger distributions at certain age milestones, which helps children learn to manage their assets over time with the help of a trustee. Then, at a later age, the child can become the trustee with full control when they have the knowledge to make better financial decisions.

    If your child is still a minor or has special needs, a trust is even more critical. Under the law, minors cannot inherit outright, so a trust is necessary to safeguard the assets for their benefit until they reach the age of maturity. The trust preserves assets for their benefit, names a trustee to oversee distributions, and does not disqualify them from receiving special government benefits like an outright inheritance would.

    Inheriting in trust provides substantial benefits that an outright inheritance does not. We can help you plan for the safe, successful transfer of wealth to the next generation. Call your Newport Beach Trust and Estate Planning attorney at Meier Law Firm today to schedule your Achieve Your Dreams Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

    The Conversation You Must Have With Your Kids and Your Parents

    Every single adult needs to have an advance health care directive written, signed and in place. This includes your children, as soon as they turn 18.  This includes you. This includes your parents.

    Without an advance health care directive in place, you would not be able to access your child’s medical records, if they are unable to communicate permission. You would not be able to ensure your health care decisions will be made the way you choose. And your parents lose the ability to communicate their wishes and remain in control as long as care decisions

    Here is what you can do to have the conversation you need to have about advance healthcare planning:

    1.  Look inward.  Before executing an advance healthcare directive with the help of your Personal Family Lawyer®, think about what you do – or don’t – want to happen if you were unable to make your own decisions.  Think about the people you would want to carry out those decisions and if the person you have in mind will follow your wishes.

    2.  Talk to your family.  One of the most tormenting things for families is having to make healthcare decisions for a loved one by having to guess what they would want.  Communicate your wishes to your family so you don’t put them in this stressful position.

    3.  Talk to your healthcare providers.  Let your primary physician and any other healthcare provider know about your decisions about your healthcare.  Ask any questions to alleviate any concerns you or your family may have.

    4.  Execute your advance healthcare directive.  Once you have decided upon your healthcare options and have chosen an agent, meet with your Personal Family Lawyer® to complete your official advance healthcare directive.  Have copies made for your family and your primary healthcare provider.

    Call 949.718.0420 to schedule a time to prepare a health care directive for your parent(s) or your adult child(ren).

    5 Things We Should Learn From Our Parents About Retirement

    When we talk about retirement, most of us are still thinking about our parents’ retirement and how they did – or did not – plan properly for it.  It’s no big stretch to think that our retirement will differ significantly from that of our parents, but there are still lessons to be learned from them in preparing:retirement

    1.  Seek out a pension plan.  If you are considering a career change or job move, look for companies that offer traditional pension plans.  Having a pension can make an incredible difference in retirement security.

    2.  If you don’t have a pension plan, compensate.  Start investing now in a 401(k), an IRA or other defined contribution plan early and keep investing in it throughout your working life.  Figure out what you could have made if you had a pension plan, and contribute that amount to your own plan.

    3.  Save for a long life.  None of us lives forever, but that doesn’t mean you shouldn’t save as if you would live forever.  Running out of money in your 80s or 90s should you live that long is a frightening prospect; medical advances are extending life spans and you need to save for a long life.

    4.  Plan for health care expenses.  It is estimated that most Americans will spend at least $240,000 on health care in retirement, and you will either need to save that amount or have a health coverage plan in place to cover your retirement medical costs.

    5.  Start early and stay the course.  As soon as you start working, aim to save at least 10 percent of your income every year – 15 percent is even better if doable.  And keep saving throughout your working years.  As your salary increases, try to set aside even more so the comfortable retirement you envision can become a reality.

    If you’d like to learn more about retirement planning strategies for your family, call our office today at 949.718.0420 to schedule a time for us to sit down and talk about an Achieve Your Dreams Planning Session.

    The Last Important Gift to Give Your Family

    As hard as it is for all of us to “plan” for our deaths, doing so is one of the best things you can do for your family.  Adding to their grief and pain by giving them no clue as to where to find your personal and business paperwork should not be a memory you leave behind.Family washing dog

    Gather the following information in a folder and let your family know where they can find it in case you die unexpectedly or have a health crisis:

    Advisors – Provide the name and contact information of any financial advisors, including attorneys, estate planners, CPAs, accountants, etc.

    Bank Accounts and Safety Deposit Boxes  – Bank name and account numbers for each bank where you have an account.  Include PIN numbers for online banking.  If you have a personal banker, include his or her name as well, with contact information.  If you have a safety deposit box, record the name of the bank, the box number as well as contents of the box and location of the key.

    Investment And Retirement Accounts – For investment accounts, provide the name of the brokerage, your personal broker, the location of your statement file, account and PIN numbers.  For retirement accounts, provide contact information for plan administrators as well as account and PIN numbers.

    Insurance  – For all your policies – health, home, car, life, long-term care – provide the name and contact information for the agents as well as account numbers.

    Health care – For your health care providers, give contact information for physicians, Medicare information and any other gap coverage you may have.

    House – If you still have a mortgage on your home, provide information on your lender and payment due dates.  Also provide the location of deeds and property titles.  Include contact information for any home service providers – cleaning help, lawn care, etc.

    Credit Cards – Make a photocopy of both sides of each credit card and provide balance and payment information.

    Vehicles – Provide information on where titles and registration information are kept. Make a photocopy of your driver’s license as well.

    Personal – Include a list of your friends and neighbors with email and phone contact information as well as all your email account log-ins and passwords.

    This last bit of planning on your part will go a long way toward helping your family cope in the immediate aftermath of your death or incapacitation.

    One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of your wealth to the next generation.  Call your Newport Beach estate planning attorneys today to schedule a time for us to sit down and talk about an Achieve Your Dreams Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

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