Brock ZettleFriendly Guidance For The Future You Want2024-03-21T18:40:07Zhttps://www.brocklegal.com/feed/atom/WordPress/wp-content/uploads/sites/1603087/2021/10/cropped-fav-32x32.pngOn Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471752024-03-21T18:40:07Z2024-03-21T18:40:07Z1. Determine your business's value
Before putting your business on the market, you need a clear understanding of its value. This requires a thorough valuation process including financial performance, assets, market conditions and growth potential. A professional business appraiser can provide an objective assessment and help you set a realistic asking price.
2. Prepare your financials and documentation
Potential buyers will want to see detailed financial records and documentation to assess the health and potential of your business. Make sure your books are current, accurate and transparent. Compile essential documents such as tax returns, contracts, leases and intellectual property agreements.
3. Plan for the transition
Consider how you will communicate the sale to your employees, customers and suppliers. Develop a succession plan that outlines the transfer of responsibilities and knowledge to the new owner. By proactively addressing these transition aspects, you can minimize disruptions and maintain the value of your business throughout the sale process.
When the time comes to transition your business to a new owner, how you handle it makes a big difference. The transition of ownership affects not only you and the buyer but also your customers and the community you built. Taking the time to properly prepare and communicate the transition can make all the difference in your business sales experience.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471742024-02-20T02:28:59Z2024-02-20T02:28:59ZBe flexible with your closing date
Sellers often want to close quickly, so they can move on to their next home. Consider offering a shorter closing period than the standard 30-45 days. Propose a 2-3 week closing timeline to give yourself an advantage. Just be sure you can secure financing and complete inspections within the expedited schedule.
Waive contingencies
Lenders require home inspections and appraisals to approve financing. However, you can waive your right to back out of the deal based on inspection results or a low appraisal. This signals to sellers that you are serious and committed. Be aware that waiving contingencies is risky if major undiscovered problems appear later.
Offer an escalation clause
An escalation clause allows you to automatically increase your offer if another buyer submits a higher bid. For example, your offer could stipulate you will pay $5,000 over the next highest offer up to a capped amount. This shows you are willing to be competitive while still protecting yourself from overpaying.
Sweetening your offer can help it stand out. Just carefully weigh the risks before waiving standard protections. With persistence and creativity, you can get your dream home even in a competitive market.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471722024-01-11T22:53:34Z2024-01-15T22:52:24ZTexas probate process
Small business owners need to be aware of the probate process in Texas. Probate is the legal process of validating a will and distributing assets. Understanding how probate works in Texas is important, as it may impact the time and cost of transferring ownership of the business and assets. By planning ahead, small-business owners can potentially minimize the challenges of probate.
The importance of a detailed will
A will serves as a roadmap for distributing assets and appointing guardians for minor children if applicable. Business owners should clearly outline how they want the management of their business to occur and who will take over its operations.
Without a proper will, the state's intestacy laws may dictate asset distribution, potentially leading to unintended consequences for the business and family.
Consideration of business structure
The structure of the business plays a significant role in estate planning. Sole proprietors, partnerships and corporations have different implications when it comes to transferring ownership. Small business owners should consider the tax implications and legal requirements of their specific business structure. This includes addressing how the business will continue to operate or how a sale would occur in the absence of the owner.
Tax planning and minimization
Estate taxes can have a substantial impact on the value of the estate. Small-business owners should explore strategies for minimizing estate taxes, such as using exemptions and deductions. Proper tax planning can help preserve the value of the business for the next generation and ensure a smoother transition without undue financial burdens.
Regular updates
An estate plan is not a one-time task but rather a dynamic document. Business owners should regularly review and update their plans. Changes in personal circumstances, tax laws or business structure may necessitate modifications.
Small-business owners in Texas must prioritize estate planning to safeguard their businesses and assets for the future. Understanding what to do can ensure a seamless transition for the business and its stakeholders.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471712023-12-18T19:43:31Z2023-12-18T19:43:31Z1. Open conversations
Engage in open and honest conversations about your wishes and preferences. Discuss financial matters, health care decisions and end-of-life preferences with your partner.
Talk about your preferences regarding long-term care. As many as 70% of people who turn 65 can expect to need long-term care at some point. Establishing clear communication can help both parties understand each other's desires and concerns.
2. Living will
A living will is a legal document that outlines your preferences for medical treatment in case you become unable to communicate your wishes. This document can address life-sustaining treatments, organ donation and other medical interventions. By drafting a living will, couples can ensure that their health care choices align with their values.
3. Power of attorney
This legal document empowers your representative to manage your affairs, pay bills and make financial decisions. Selecting a trustworthy individual is important.
4. Beneficiary designations
Review and update beneficiary designations on accounts such as life insurance policies, retirement plans and investment accounts. Ensure that these designations accurately reflect your current wishes, as they supersede instructions in your will. Regularly reviewing and updating beneficiary information can help avoid complications in the event of illness.
5. Will
A will outlines the distribution of your assets. While it addresses post-mortem matters, it can also include provisions for the care of minor children, if applicable. Couples should collaborate on creating wills that align with their joint goals and preferences.
Regularly revisiting and updating these plans can ensure they remain relevant throughout the various stages of life.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471702023-11-14T17:20:35Z2023-11-14T17:20:35ZWhat is probate?
Probate is the legal process of verifying a person's will to ensure its validity and execute its instructions. When someone in Texas passes away, their assets could require probate through the state courts.
Typically, the Texas Estates Code requires this process for assets with titles in the deceased's name. Executors file with the court and present the will for validation. If the court approves the will, the document becomes public, enabling a smooth transfer of assets.
Why might people want to avoid probate?
Families might seek to bypass probate due to its time-consuming and public nature. The process of validation and possible disputes could result in delays and the disclosure of personal details. Alternatives to probate often ensure a more efficient and private transition of assets.
However, it appears that many families are not aware of methods to avoid probate because of a lack of education or preparation. Findings from the 2021 Texas Judicial Branch saw a 19% rise in the number of probate cases from the previous year. Practical steps can allow a family to keep certain assets or even a whole estate out of probate.
When can assets avoid probate in Texas?
To avoid probate, individuals often employ strategies that enable assets to pass directly to heirs without court intervention. For example, life insurance proceeds, IRAs and retirement accounts pass directly to designated beneficiaries. An individual might choose to put an inheritance in these vehicles to circumvent the probate process.
Further, jointly-held properties with survivorship rights automatically transfer to the surviving owner without court involvement. Trusts offer another avenue, guiding asset distribution per trust terms. Real property can skip probate using Transfer on Death or Lady Bird Deeds that specify beneficiaries.
Another situation that exempts an estate from the probate process is if no will exists and the estate's total value is less than $75,000. In such cases, the inheritors only need to file an affidavit with the court to collect the property 30 days after the death.
These alternatives facilitate a smoother and more direct transfer of assets, eliminating the need for the formal probate process. Understanding these circumstances empowers individuals to navigate estate matters efficiently and honor the wishes of the deceased.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471692023-10-24T19:19:24Z2023-10-24T19:19:24ZSignificant challenges
One child getting more money or valuable heirlooms than another can lead to, at best, complicated feelings. At worst, it would create an unrepairable rift with a family member feeling slighted, believing that the amount of money they received was reflective of their position in the family unit. The natural target of their anger is the sibling or siblings who received more assets.
The possibility of probate disputes is a clear and present danger to a once unified family now dealing with heated arguments. The sibling selected as a personal representative may also be the source of dissension. With that in mind, parents performing the proactive steps that come with estate planning should consider the possibility of potential dissension.
Far too many probate disputes fill up the dockets of courtrooms throughout the nation. Relationships that were already strained can fray and break apart over the smallest asset or dollar amount.
Options for resolution include:
Mediation – A growingly popular means to resolve estate planning disputes in an environment where everyone has a voice
Draft/drawing – Allowing loved ones to choose an item to keep. Whether the order involves the oldest to the youngest or a blind drawing, it has the potential to keep the peace.
Liquidation of significant assets – A residence or vacation property is challenging to divvy up among children. If sharing is not an option, parents should sell the assets. While emotionally challenging, it can potentially establish a more peaceful environment after a tragic loss.
Tragedies affect family members differently. However, having estate planning documents in place and communicating your intentions can help maintain family harmony.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471362023-10-02T20:03:19Z2023-10-02T20:03:19ZEstate planning and charitable giving
Estate planning involves making arrangements for the distribution of your wealth and assets after your death. To include planned giving in your estate plan, you need to name the charitable organizations of your choice. If you currently donate to one or more charities, consider including those specific charities in your estate plan.
You might want to consider the tax implications when deciding how to structure your donations. This is important because there are several ways in which you can set up your donations.
Bequests
A bequest is a one-time donation made after you pass away. You can choose as many charitable organizations as you want. Each organization will receive the amount specified in your will or living trust.
Charitable remainder trust
A charitable remainder trust is specifically for planned giving purposes. You’ll place property or cash into the trust. The trust then pays you a fixed amount of income each year. After you pass away, your specified charity receives payments from the trust.
Donor-advised funds
You can create a donor-advised fund by contacting a 501 C3 organization. This type of organization is tax-exempt because it offers charitable programs. Once the fund is created, the organization has control of the fund, but you make donations. You or a representative also have some say in the distribution of funds from the account.
Including planned giving in your estate plan allows your assets to continue helping charities you care about. It’s about giving back to your community and leaving a lasting legacy.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471122023-09-06T03:21:07Z2023-09-05T03:19:42ZLLC operating agreements
An LLC operating agreement is a legally binding contract that details the key elements of a business. LLC operating agreements prevent business law disputes between members because they memorialize verbal commitments and make each party’s duties and responsibilities clear. The provisions of an LLC operating agreement vary from business to business, but they usually cover:
• The percentage of the company that each member owns
• How profits and losses will be distributed
• The financial contributions made by each member
• When meeting will be held
• The rules for buying, selling or transferring membership
• The voting rights of each member
• The duties of members and managers
LLC operating agreements in Texas
Texas law does not require LLC members to draft operating agreements, but it puts rules into place for those that do. Written agreements must be signed by a member, manager or authorized officer of an LLC, but they do not have to be notarized. LLCs in Texas must have unique names that make clear that the company is an LLC, and they are required to appoint a registered agent with a physical address in Texas.
Avoiding confusion and preventing disputes
An LLC operating agreement is a legal contract that outlines how a company will be run. These documents let every member know what their responsibilities will be, specify how profits will be allocated and establish rules for buying, selling or transferring membership, which could avoid confusion and prevent disputes.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471112023-08-03T17:22:58Z2023-08-03T17:22:58ZCreating a will
For unmarried individuals, a will is vital as there is no default beneficiary like a spouse. Through a will, you can specify how your assets and possessions should be distributed among family members, friends or charitable organizations. Additionally, a will allows you to appoint an executor to manage your estate and ensure your wishes are carried out.
Power of attorney
A power of attorney authorizes someone to act on your behalf for financial, legal and healthcare decisions when you are unable to do so yourself. This document ensures that your interests are protected and that a trusted person can handle your affairs as per your wishes.
Beneficiary designations
Unmarried individuals should review and update beneficiary designations on various accounts such as retirement plans, life insurance policies and investment accounts. These designations determine who will inherit these assets directly, bypassing probate.
Healthcare directives
Preparing a living will and appointing a healthcare proxy allows you to express your preferences regarding medical treatment and end-of-life care. Unmarried individuals should have a designated person that will make healthcare decisions on their behalf.
Trusts
Depending on individual circumstances, establishing a trust might be beneficial. Trusts are estate planning tools that can help minimize taxes, provide privacy and manage assets effectively. For unmarried couples, a trust can be particularly useful in ensuring that both partners are taken care of financially, even if they do not marry.
Estate taxes and charitable giving
Singles should be aware of estate tax laws and how they may impact their assets. Furthermore, charitable giving can provide a way to support causes that are important to you while potentially reducing estate taxes.
Regular review
Whether married or single, estate planning is not a one-time event. Life changes, such as new relationships, childbirth or acquiring significant assets, should prompt you to review and update your estate plan regularly. After all, your legacy depends on passing your assets on to beneficiaries and causes that you deem worthy and impactful.]]>On Behalf of Brock Zettlehttps://www.brocklegal.com/?p=471082023-07-27T18:49:00Z2023-07-04T03:44:18ZFind a business with potential
Locate a business with growth potential or positive cash flow in an industry you understand. To mitigate risk, consider companies with a diverse customer base rather than those with a few large customers. Cast a wide net by using business broker sites and working with local business brokers. Connect with professionals such as CPAs and attorneys who can refer you to small business owners and hidden opportunities to buy companies that align with your investment objectives.
Negotiate the best price
To lay the foundation for fruitful negotiations, hire an experienced business valuation professional to determine the company's true worth. They will consider revenue, net income, expense normalization and industry-specific factors. Valuation professionals also consult relevant resources and benchmarks to fine-tune their appraisal.
Use the valuation to start negotiations and strive to reach a tentative agreement on a purchase price. Make the owner an unbinding offer, assess whether an asset purchase or stock sale makes more sense and consult with legal counsel experienced in business law related to acquisitions to minimize risk and ensure a favorable outcome.
Submit a Letter of Intent and begin due diligence
Draft the key terms of your purchase offer in a comprehensive Letter of Intent (LOI). This document also demonstrates your commitment to purchasing the company and grants you exclusive rights to review the company's private information for a specified period.
Begin your due diligence and thoroughly review the company's financial, legal and operational aspects. You may need to engage experts to analyze the data and identify potential risks. Based on findings from the due diligence process, make adjustments to the purchase price and other tentative aspects of the deal, if warranted.
Obtain necessary financing
Secure the financing you need for the transaction using a combination of equity and debt. Consider financing options such as SBA loans, traditional bank loans or financing provided by the seller. Work closely with lenders and financial advisors throughout the due diligence process to ensure you have sufficient funds to complete the transaction.
Close the transaction
Finalize the transaction with the help of experienced legal counsel, a CPA or other professionals as needed. Set a closing date for the purchase, transfer the funds into escrow and fulfill any legal requirements. Upon approval of the documentation, the seller will receive the funds, and the ownership will transfer to you. Address any licensing and other requirements to ensure a seamless transition.
Acquiring a business involves several key steps, careful consideration and diligent execution. With attention to detail during each stage, you can mitigate risks and maximize opportunities as you take this next step in your entrepreneurial journey.]]>