Katie Blom

Understanding COVID-19 Laws: Go to the Source

The situation with COVID-19 is ever changing.  Some of the hardest hit are small businesses.  I am, like my partners at the firm, a small business owner as well as an attorney.  We know there is no playbook for the handling of this virus.  However, when making decisions for your business, such as whether to close or what you need to provide employees, it is very important to go “directly to the source” when new laws or orders are passed.  Do not rely on the news or Facebook.  For example, on Tuesday, Governor Evers issued Emergency Order #5.  This is the law that changed the game for bars and restaurants and prohibits public or private  “mass gatherings” in the State of Wisconsin.  You can find a copy of that Order here:  https://evers.wi.gov/Documents/COVID19/UPDATEDOrder10People.pdf

If you read the Order, “mass gatherings” are defined as “any planned or spontaneous, public or private event or convening that will bring together or is likely to bring together 10 or more people in a single room or single confined or enclosed space at the same time.”  There is a lot of information in that statement that wasn’t reported on the news.  This even precludes gatherings of ten or more in your own home.  Note also that the order is punishable by imprisonment (yikes!) and/or fines.  Fortunately, we have not heard of anyone receiving fines, but we do know police are enforcing this Order in some communities.

As with any good law, there are many gray areas, but those gray areas are where you can decide what is best for your business, as long as you are complying with the portions of the law that are clear (like the closure of indoor shopping malls!). Reading the Order in its entirety also helps to understand why certain businesses are closed and others are not.  Please also remember that laws are made at Federal, State, and local levels, so when you hear something, it is also important to pay attention to what level of government is making that mandate.

It probably won’t be long before our current situation changes again.  When it does, don’t rely on the news when making important decisions for your business and employees.  Go to the source and educate yourself (as best you can), think through your situation within the confines of the law, and then ask questions.  We are always here to help you with questions or thinking through the next steps.


Katie Blom


About the Author – Kathryn M. Blom is an attorney with Epiphany Law and a business owner.  Her practice focuses on complex business law, contracts, exit planning, securities, mergers and acquisitions. She advises her clients on how to identify effective solutions and achieve their business goals.

Avoiding the Top 7 Landmines in M&A

If you’re a baby boomer and you’re a business owner, chances are you’re starting to think about selling your business. So many unknowns surround the sale process, but one thing is for certain–you will want to be confident about whatever decision you make.  Confidence starts with knowledge of the sale process and an understanding of how costly shortcuts can be. You only have one chance to sell your business and there are no do-overs. What follows is a brief summary to help you learn–and avoid–the top seven landmines we see in Mergers and Acquisitions (M&A) transactions.

Landmine #1 – Not appreciating the state of the Mergers and Acquisitions market.

The M&A cycle has large ups and large downs. This is out of your control. However, understanding the market allows you to be proactive and take the best course of action. Currently, the market is hot and buyers are overpaying for desired targets.  The M&A market won’t stay like this forever and the time to sell may very likely be now.

Landmine #2 – Not Understanding Business Valuations

Could a mother or father put a price tag on a child? For the owner, selling their business almost seems like a similar struggle. Owners have poured their blood, sweat and tears into building and running their company; making it difficult for them to be objective.  A Business Valuation, even a short form valuation, will help the owner get a true understanding of what value a buyer would attribute to the business.

Landmine # 3 – Not Understanding Net Value

Much time is spent negotiating the purchase price, but what should really matter to a seller is how much money they will put in their pocket at the end of the transaction.  The net value should always be computed on the front end. To avoid disappointment, you need to keep in mind how different the sales price can be from the net value. Just some examples of items that needed to be deducted from the sales price are as follows:

  • Transaction expenses (including broker, lawyer and accountant)
  • Equipment financing
  • Lines of credit
  • Working capital
  • Taxes (including depreciation and recapture)
  • Escrow
  • Seller Note

Landmine #4 – Not Understanding Risk Allocation

Warranties and representations are the promises the seller makes to the buyer as to the condition of the business. They tend to make up the bulk of the long purchase agreement that will be signed between the parties.   Common examples include:

  • Ownership of Intellectual Property
  • Proper Classification of Employees
  • Binding Contracts
  • Environmental Condition of Property

Another important aspect of risk allocation is indemnification.  Sellers must pay attention and heavily negotiate how much post-closing risk they will bear.  The seller and the buyer must negotiate complicated matters such as a cap on post-closing liability, how long representations and warranties will continue after closing, and if a deductible applies to minor claims that arise following closing.

Landmine #5 – Not Planning Ahead

The value of proactive planning cannot be overstated.  Identifying and fixing a problem before a buyer discovers it will have very real positive impact upon the value the buyer will pay and the amount of post-closing risk a seller will bear.  If you plan to sell your business in three years, the time to start planning is now.  (Somewhat) simple steps you can take to increase value include:

  • Increase EBITDA
  • Reduce working capital
  • Lock in key employees
  • Reduce long-term contractual obligations/buy-outs
  • Eliminate risks found in due diligence
  • Clean up financials
  • Ensure contacts are binding and assignable

Landmine #6 – Short cutting the process.

It is also essential to let an experienced advisor guide you through the sale process. Short-cutting the process can lead to leaving money on the table or blowing up the entire deal.

Landmine #7 – The Wrong Players

Understanding the nuances of the M&A world takes years of learning.  Buyers can identify an educated and committed Seller by the team they assemble around them.  Do not leave the sale of your most important and valuable asset to a general practitioner.  Having an experienced M&A attorney will translate into improved economic consequences, less risk, and a smooth closing.  A buyer’s counsel will spot an inexperienced advisor a mile away. And, they’ll negotiate accordingly.

If you are thinking of buying or selling a business, it’s important to be proactive. Advanced planning now will mean the difference between achieving your business goals or missing the opportunity. To learn more, you can email info@epiphanylaw.com or call us at 920-996-000.


About the Author – Kathryn M. Blom is an attorney with Epiphany Law. Her practice focuses on complex business law, contracts, exit planning, securities, mergers and acquisitions. She advises her clients on how to identify effective solutions and achieve their business goals.

Healthcare POA and Living Will

At Epiphany Law, estate planning is about “peace of mind.” Yes, it is important to ensure that your “stuff” goes where you want it to go and that you pay the minimum amount to Uncle Sam.  But peace of mind also means that you have planned for incapacity and determined who will take care of you if you cannot do so.

The death of Terri Schiavo ten years ago was widely publicized at the time, but today there is a whole new generation of adults who may not appreciate the lessons taught by her unfortunate story.  At the age of 27, Terri Schiavo suffered a cardiac arrest. She was resuscitated, but was diagnosed as being in a persistent vegetative state. A feud ensued between her husband and her parents as to whether to remove Mrs. Schiavo from life support. Her husband insisted Terri would not want to be kept alive under the circumstances, but her parents vehemently disagreed. Mrs. Schiavo remained on life support as her husband and parents battled for 15 years in the court system through 5 federal lawsuits and 14 appeals. Ultimately, the federal court system sided with Ms. Schiavo’s husband, and her feeding tube was removed.

In yesterday’s blog, we covered the importance of a power of attorney for your financial affairs. Today, we talk about a power of attorney in the context of YOU—your body and your health.  Every good estate plan must include a Power of Attorney for health care decisions. Quite simply, in such a document, you name an agent to make decisions for you about your health and medical care if you are unable to. This document should include important considerations such as withholding life support, decisions while you are pregnant, and placing you in a nursing home. Who you should name is obviously a personal decision. Consider someone local in the event of an accident or emergency, who can make decisions under pressure, and can act based on your wishes, not their own.

After you determine who will act on your behalf, the other equally important part of the equation is telling your agent what those decisions should be. The actions of your agent will have real “life and death” implications—for you and for them. If you don’t clearly articulate your wishes and desires, they will make decisions based on their own values, which might not line up with yours. A clear statement of your intentions about life support, for example, can bring a great deal of peace to a tough choice.

Now that you have the pieces, let’s look back at Schiavo story. Terri had taken the first step and designated her husband as her Power of Attorney, giving him the ability to make decisions for her. She did not, however, have a Living Will, and the courts were left to figure out what she wanted, presented through the eyes of her parents and husband. A clear statement of her intentions would have probably stopped the fight before it started.

“Stuff” is important, and having a plan in place ensures accumulated wealth will pass down to the next generation. Health care documents are arguably the most essential piece of the plan. If you don’t have a plan yet, you should.  At a minimum, you should name an agent and let them know how you feel about your medical decisions. If you don’t, a court will do it for you.

Yours Truly,

Epiphany Law Estate Planning Team

Wills vs. Trusts

We all know about “Wills” and “Trusts”, right?  Well, at least we’ve all heard of a “Will” and a “Trust.” Do you really know what they are or what they do? Do you know how they differ, or the advantages of one versus the advantages of the other? Both are very useful, but serve different purposes. Sometimes just one is used in an estate plan, and sometimes both are used. The key is to know the purpose of each document and use them to fulfill your goals.

Wills and Trusts differ in countless ways. One primary difference is when they take effect.  A Will, for example, only takes effect upon death. Prior to death, a Will is nothing more than a list of directions waiting to take control. Upon death, however, a Will directs who will receive your property and appoints a person to carry out your wishes. Trusts, on the other hand, take effect immediately upon execution. A Trust doesn’t have to wait until death to be effective.  In fact, a Trust can manage and distribute profit at any time, before or after death.

Another primary difference between a Will and a Trust is any property owned by a Trust avoids probate. A Will, on the other hand, does not avoid probate. That means when a Will is used, a court will oversee the administration of the Will and ensure the property goes to the proper beneficiary. The probate process typically lasts 9 to 18 months, and can cost thousands of dollars. Because property owned by a Trust avoids probate, that property is transferred to beneficiaries cheaper and more efficiently.

Sometimes it’s best to use a Will and a Trust together. For example, a Will allows you to appoint guardians for minor children. A Trust can help plan for disability or estate taxes.  Because of these reasons, and countless others, the best option may include the use of a Will and a Trust. Under this scenario, we can use the benefits of each document to our advantage, while minimizing the effect of each document’s disadvantages.

As you can see, there is no textbook answer to the age old question, “Should I have a Will or a Trust?” The answer to that question is based entirely upon each person’s facts and circumstances. We at Epiphany Law know not every situation calls for a Will, and not every situation calls for a Trust; we are an excellent resource to consult when preparing an estate plan. Our goal, after all, is to create an estate plan specifically tailored to each client, and to help execute the plan.

Yours Truly,

Epiphany Law Estate Planning Team

Extra Extra: Read All About It

Next Sunday, October 18, 2015, is the official start of the 2015 National Estate Planning Awareness Week (“EP Week”). No, EP Week is not a creation of Epiphany Law, LLC (“Epiphany Law”). In fact, we can’t take any credit for EP Week. EP Week is a Congressional creation. Yes, Congress created EP Week because estate planning is that important. In conjunction with the National Association of Estate Planners & Councils, in 2008 Congress declared the third week of each October as National Estate Planning Awareness Week. That means for a full week, from October 18 – October 24, we, as Americans, are to promote estate planning awareness. This year Epiphany Law is doing its part by, among other things, publishing a series of articles. You will be receiving a copy of each of those articles, this being the first of six. Yup, you will be receiving six articles from Epiphany Law over the next week. We can only imagine your excitement! In all seriousness, though, it is estimated that over 120 million Americans do not have an up-to-date estate plan. Without question, this makes estate planning one of the most overlooked items on an individual’s to-do list. Whether a person has $50,000 or $50,000,000, they will benefit from a well drafted estate plan. After all, estate planning is more than Wills and Trusts. As one can easily see, estate planning is a necessity for nearly every American. If done right, estate planning should make life easier on the planner and the planner’s family, plus save thousands of dollars. Who wouldn’t want to ease their family’s burden and likely save money along the way? The purpose of this article is to inform you of what’s coming, while providing some useful content. It’s our first step to promote estate planning awareness. Beginning next Monday, October 19, we will post daily articles about estate planning. Each article will focus on a specific aspect of estate planning, and the articles will increase with complexity as the week progresses. We will explain Wills and Trusts, discuss the benefits of the Power of Attorney documents, and even take a look at special trust vehicles used for Medicaid planning and IRA inheritance planning. Our goal is education. It really is that simple. If we can teach everyone a few things about estate planning, and share information about some amazing tools, we believe we have done our part to promote EP Week. Of course, if something along the way triggers your interest, or you simply have more questions, do not hesitate to contact us at your convenience. We hope you find Epiphany Law’s participation in National Estate Planning Awareness Week beneficial and informational.

Yours Truly,

Epiphany Law Estate Planning Team

Trust Management By Committee: Should I Make My Children Co-Trustees?

Most people name themselves (and/or their spouse) as the initial trustees of their living trust. You’ll need to name successor trustees to manage the trust when you’re no longer able to. Since a successor trustee should be someone you trust, many people choose a child. But what happens if you have several children?

In some cases, one child may be the clear choice for any number of reasons—they’re more responsible or maybe they live nearby. If you think more than one child could do a good job, you can always list them in order: your daughter living in Green Bay may be first choice, but other children living further away can be alternatives.

Issues arise when a person names their children co-trustees. There are some advantages to this. They can rely on each other for support and share the burdens of managing a trust. But co-trustees can also lead to big problems, especially if they can’t get along. All decisions will be made by committee and, generally, each trustee will need to sign off on important documents. Even if the co-trustees do cooperate, it can take longer for decisions to get made simply because more people are involved.

Location, Location, Location…and Zoning

Location is critical to the success of your business. You probably already know to consider visibility, convenience, and traffic patterns when deciding where to locate. But you may not know there’s another element to consider: zoning. Zoning laws limit the ways you can use property located in that area.

Zoning laws have gotten much more complicated that just separating housing from businesses. Many cities now restrict the types of businesses that can go in a particular area and those restrictions aren’t always obvious (for example, some cities treat churches as “residential” uses). Zoning laws also now include additional requirements: signage, parking, visual appearance, and even limiting the number of businesses.

Fortunately, there are three things you can do to protect yourself from running afoul of the zoning laws:

1. Do your homework! Always check the zoning for a property before you buy or lease it. Some cities will agree to change zoning, but in those cases its best to make the sale or lease contingent on the zoning change going through.

2. Be nice to your neighbors—cities usually wait until a neighbor complains before pursuing violations. Building good relationships with your neighbors gives them less reason to complain.

3. Never rely on how the previous owner used the property—just because the previous owner used the property for a particular business doesn’t mean you can. The previous owner might have been grandfathered in (the business existed before the zoning law) or no one challenged its existence.

Remember, fighting zoning laws can be difficult and expensive. On top of that, cities usually have quite a bit of leeway to make and enforce zoning laws. Instead of fighting them, plan ahead to find the perfect location for your business that has the right zoning.

What to Know before you Join an LLC

Joining an LLC as a new member can be a great professional opportunity. But with all the excitement, many people forget to take a serious look at what they’re signing up for. Part of the reason is that each LLC is different – LLCs are controlled mainly by the Operating Agreement written by existing members. Here are the four things everyone must know before they join an LLC.

1. You can’t just “quit” an LLC like you can a job.

Some LLCs might offer you a membership interest instead of hiring you as an employee. There are certainly advantages to this, but one disadvantage is that it’s much harder to dissociate from the LLC as a member than it is to quit as an employee.

2. Not all members play the same role.

If you want to play an active role in running the business, make sure you’re joining as a managing member and the Operating Agreement spells out your decision-making ability. Passive members simply provide funds and sit back.

3. Membership interests are not created equal.

Some members may (and often do) have a larger percentage than the others. They might have more say in running the company or be entitled to a bigger percentage of profits. Make sure the percentage you’re being offered is sufficient for what you want to get out of the opportunity.

4. Contributions.

Joining an LLC requires you to make an initial capital contribution (usually), but many people don’t realize they can be on the hook for additional contributions down the road. Failing to make these “capital calls” could lead to dilution of your ownership, losing your interest entirely, or lawsuits.

Fortunately, all of these concerns should be addressed in an LLC’s Operating Agreement. Taking a little time to review the Operating Agreement with an experienced business attorney can help you figure out if becoming a member is a good opportunity for you.

Expanding Your Business With Business Certifications

Both government and private organizations offer businesses multiple ways to “certify” their business as a particular type. Common certifications include small business, woman-owned, minority-owned, and disabled veteran-owned. But what do those certifications mean and is it worth looking into certifying your business?

There are two main reasons businesses choose to get certified. The first is that government agencies and even some private companies offer business opportunities to particular types of businesses. A good example is that many state agencies set aside a certain number of contracts for small businesses certified with the U.S. Small Business Administration.

Another reason to get certified is marketing. A business targeting women might attract more customers if they can advertise as a certified woman-owned business. Similarly, many customers will appreciate knowing that they’re supporting small or veteran-owned businesses.

Before deciding to certify your business, it’s a good idea to do your homework. First, make sure you qualify. Second, specific business opportunities may require you to be certified by a particular organization (like a national organization rather than a state government). Finally, research the certification process. Some certifications may be fairly simple and ask for limited information. Others require you to follow a lot of steps, including an on-site visit, and can take a while to complete.

Certifying your business can be a great way to market your business or access new opportunities. Our attorneys can help you decide if it’s the right choice for your business and walk you through the process.

Keeping It In The Family: Protecting Your Family Cottage With an LLC

Some of your family’s best times were probably spent at your family cottage. It’s only natural, then, that you want to keep the cottage in the family for your children and grandchildren to enjoy. Simply leaving the cottage to your relatives, however, can lead to unexpected problems in the future.

Take an example: you decide to leave your Door County cottage to your three children. The default result means that each of your children becomes a tenant in common (TIC). As TICs, each child has the right to use the entire property at any time and is responsible for certain costs such as taxes, mortgage and insurance.

On the other hand, TICs don’t have to chip in for repair or improvement costs and, if one wants out, the property can be partitioned or sold. Additionally, creditors could get a hold of one child’s interest and force a partition or sale of the property—your other two children would get their share, but the cottage wouldn’t belong to the family anymore.

A better option is to create a family LLC, where the company owns the cottage and your family members own units of ownership in the company. Properly drawn up LLC documents can solve many of the problems tenants in common have. You can set rules for use and a method for paying expenses. You can also determine who will make important decisions and how. You can also restrict transfer of ownership interests to non-family members. Most importantly, because the company owns the cottage, creditors can’t force a sale or partition, protecting other family members from losing the cottage.

While it sounds odd to form a company to protect family property, a family LLC can help you avoid the pitfalls of multiple owners and ensure family days up at the cottage for years to come.