Month: August 2017

Preserving Harmony at the Family Cottage

Owning a family cottage can undoubtedly create numerous memories for you and your family. Whether it be boating, fishing, hunting, swimming or just time away, these memories are cherished.

Unfortunately for some, a family cottage can also be the source of great conflict and hostility for successive generations.  When two parents own the cottage, the chances for disagreement are minimal.  However, when the time comes and the cottage is passed to the four children, it is more likely that there will be disagreements. In this example, suddenly, the cottage has four owners instead of two.

When multiple people inherit a cottage, hunting land or other property, they typically take the property as Tenants in Common.  This means that each owner has an undivided interest in the whole of the entire property so that even a 1% owner has the same right to occupy the entire property as a 99% owner.  Also, a tenant in common can sell, give, or loan her interest to anyone she chooses. Outright ownership by multiple family member is not ideal when the goal is to keep the cottage in the family as a source of happy memories.

Fortunately, with proper planning there are ways to make sure any potential problems are avoided. One way to allow for more harmonious ownership is creating a Family Cottage LLC.  A Family Cottage LLC will change the way the property is owned.

First, let me explain briefly some of the relevant background of LLCs.  The owners of an LLC are referred to as members.  The members can control the governing of an LLC by entering into an operating agreement, with written rules, obligations, restrictions and conflict resolution procedures.  LLC members can also appoint a manager of the LLC to centralize decision making and operating control in one person.

A Cottage LLC does not have to be complicated and there are many reasons why it may help:

  • An LLC can protect owners from liability
  • An LLC Operating Agreement will dictate the capital contribution rules for each member of the Cottage LLC. Meaning each member will be responsible for their share of the expenses.
  • An LLC Operating Agreement will define a fair method for dividing up and alternating use of the prime times.
  • An LLC will assign responsibilities for management tasks such as cleaning and maintaining the house and the yard.
  • When time comes, for one owner to sell or transfer her/his shares, a Cottage LLC allows for flexibility and minimizes the risk of a forced sale.

Ensure the future of your family cottage will continue to be a cherished, harmonious place to create memories, by contacting us to help you create a Cottage LLC today.

Small Business Owners: The Future Might Not Be All That Uncertain

If you are like most small business owners, you find it difficult to plan because your future has more unknowns than your non-business-owning counterparts. You might not know how much your business is worth, when you should sell, where to find the right buyer, how to fetch the best price, or even how much insurance to carry. If you have a family business or operate with a partner, you also have additional layers of both complexity and ambiguity.

When planning for the future, it is easy to become overwhelmed by all that isn’t known. When you step back and evaluate the questions marks that dot the path to your future, however, you might realize that not everything is unknown.

The value of your business is a prime example of a discoverable fact, yet if you are like 98% of the other small businesses in this country, you don’t know the answer.

With less than a half an hour of your time and innovative technology that harnesses the power of big data, you can get an accurate business valuation to illuminate your path. The valuation will give you an understanding of how much your business is worth, how it compares to others in your industry, and the levers that could drive future growth.

According to a Financial Planning Association/CNBC study, over 70% of small business owners have the majority of their wealth tied up in business assets. Knowledge of how much yours is worth brings clarity and insight into retirement and estate planning discussions, succession planning and exit strategies, and insurance protection decisions.

As Lieutenant General and former Deputy Director of the CIA, Vernon Walters, once said, “Uncertainty is the most chilling thing of all.” To reduce the amount of ambiguity you face by determining the value of your largest asset, consider obtaining a business valuation today.