Cornwall Wills and Estates Lawyer Asks, “Will Your Small Business Survive after Your Death?”
You’ve worked so hard for the success of your small business, but have you thought about what will happen to it after you’re gone? By planning in advance, the small business owner can ensure that his or her wishes are followed should the unthinkable occur. Not only does this kind of planning make for an easier transition on those left behind, but it also saves money and can literally keep the business from failing altogether.
Your small business is a part of your estate, and just like your home and other assets, planning needs to be done for how it should be handled upon your death. You’ll want to go over your options with a qualified Cornwall and area wills and estates lawyer (as well as your accountant!) and make your decisions legal and binding with proper documentation. Of course, you’ll also want to communicate with those individuals who will be charged with following your wishes and keeping the small business running smoothly.
Unfortunately, the death of a small business owner can also spell the death of the business. Estate administration (also known as probate) taxes and income taxes can be so expensive that the business just can’t survive paying them. Or, the other partners in the business cannot afford to buy the decease’s share in the business, so the business gets sold to a third party and the profits divided.
Laws like this play a role in the fact that small businesses do not typically survive through the generations. According to The Small Business Review, only about 30% of family businesses make it to the second generation, 12% to the third generation, and 3% to the fourth generation. Obviously, there are a number of factors involved, but the need to pay taxes and take care of other transitional costs creates a significant burden in passing a business on to heirs.
By planning in advance, you can take advantage of tax reduction planning and limiting (or avoiding) probate taxes. Many of the options available to small business owners can only be utilized before death, not after, so it is important to make plans for your business succession now.
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Michele R.J. Allinotte is the owner of Allinotte Law Office in Cornwall, Ontario and she helps her clients make the best decisions for themselves, their families and their businesses. Her practice focuses on the areas of business law, estate planning and real estate. Visit www.YourCornwallLawyer.com to get her FREE Peace of Mind Personal Inventory to make sure that your family has all the information they need.
Wait! Don’t Sign That Contract!
I hear it all the time from my clients in Cornwall and area, “Can I get out of this [insert name of contract here]?”.
People are asking about leases, guarantees, agreements to purchase a home, weight loss center memberships, you name it.
My answer is usually the same. “Well, I would have to review the agreement first.”
Some agreements do contemplate how to “get out” of the agreement, or, in legal speak, how to terminate the agreement.
If the contract says you can “get out” of an agreement before the term is up, normally you will need to have a reason (which would be set out in the agreement), or you have to give notice to the other party for a period of time, or it is going to cost you.
Most of the time there is a cost to ending the agreement early.
In other agreements, there is nothing in the document that discusses ending it early.
So what do you do then?
Well, you can try to negotiate with the other party, or you can stop honouring your obligations under the agreement and wait for the other party to sue you.
Because that is what generally happens when you don’t fulfill your side of the bargain – someone is going to pursue you for whatever money they have lost. If it is a lot of money, they are going to sue you.
Depending on the fact situation, you might be sued successfully if you break your contract.
And then you will be responsible not only for your initial obligations in the agreement, but you also might have to pay interest, and, sometimes, part of the legal costs of the other party.
Many of my clients are surprised at what their obligations are under the agreements and contracts they have signed.
Problem is, they come to me AFTER they have signed the agreements.
It doesn’t do much good for me to explain all of your obligations under a contract once it has been signed. I cannot change the contract for you (unless the other party would agree to amend the contract, which isn’t likely).
So, next time someone puts a contract in front of you to sign, don’t just sign it blindly.
First of all, READ the contract. It may not be what you agreed to, or you may not like the terms and want to renegotiate some items.
Secondly, if you aren’t sure what it means, ask to have a few days to review it before you sign. You can use that time to have your lawyer review it, or to look it over in more detail yourself so you can figure out what the heck it means.
I know not everyone can afford to hire a lawyer for every contract they sign, but think about what it might cost you if you want to get out of the contract. If you couldn’t handle the cost of fulfilling your end of the bargain if certain things do or don’t happen, you should get some legal advice on what it all means and also, if you can “get out” of it if you need to down the road.
I can almost guarantee that the cost of having me review a contract after it is signed to see if you can “get out” of it (and to help you deal with attempting to get out of it) is going to be greater than the cost of reviewing the agreement up front before you sign.
I can also tell you that almost every time I review a contract for a client, we end up asking for changes.
Some of the things we end up changing could have cost my clients a lot of money if they had signed the contract as is.
And sometimes, my clients decide that once they know their obligations and the true cost of the contract, it is not worth it, and they don’t go through with the agreement.
I recommend that you review in detail EVERY agreement you sign. A gym membership, a lease, a loan agreement, an agreement to buy a home or other large ticket item, you get the picture.
And if you aren’t sure about what is in the agreement or what your obligations are (or what the other party’s obligations are), you should get legal advice.
This is especially important for small business owners and entrepreneurs.
I have membership programs available for clients who want to have ongoing access to legal advice for contract reviews and other issues but who are concerned about managing the cost of legal services.
If you are interested in Allinotte Law Office’s membership program, give us a call at 613-933-7720 or email erin@allinottelawoffice.com.
Are You Planning On Getting Hit By A Bus?
As you know, I do estate planning, which means I talk to clients about what might happen should they die or become incapacitated.
For some reason, the phrase “So, if I get hit by a bus tomorrow …” tends to come up quite often during my conversations with clients. Realistically speaking, many of my clients will have no need for their estate planning documents until they are well into their old age, so some of the things we plan for will never actually happen.
But we do plan for them because, you never know, you just might get hit by a bus some day. And if you did, what would happen?
I’ve been thinking about this for a few days from a few different angles.
The first is that my husband was at a work meeting and one of the topics was planning for succession at his place of work. The complaint was that there was not formal training to mentor those employees who might eventually move up the ladder, so to speak.
When my husband and I talked about that, I said that yes, there needs to be a plan for when people retire, but also, you need to think about people getting hit by a bus (see, it comes up often!). What would happen if an employee/supervisor/manager didn’t show up for work one day? Would people know what he was working on? Could things be picked up where they were left off? Is there essential information about the work place that only that individual knows? These are all things that every work place needs to consider.
See, the thing is, I actually know someone who got hit by a bus. When I worked in Ottawa, it happened. One of the IT employees was walking to work and was struck. He was conscious and so he was able to make a phone call. His first phone call was not to his family, but to his supervisor at work! Thankfully he was ok, but what would have happened if he wasn’t?
Another reason I have been thinking about this is because I knew I was attending a meeting last week and the presentation topic was succession planning for business owners.
It was a great presentation on a topic so many business owners tend to ignore or delay their decision making (sometimes until it is too late). The statistics back me up on this one – according to an October 2006 study by the Canadian Federation of Independent Businesses, over 65% of small and medium sized business owners were intending to retire within 10 years. Of all business owners surveyed, only 10% had a formal plan to exit the business. Some had an informal plan, but over 50% of business owners had no plan at all!
Thinking about your death isn’t exactly fun. But we all have a 100% chance of dying. Hopefully, we won’t get hit by a bus tomorrow (or any day) but it is much easier to plan for it now than to leave our families, our work places and our businesses to pick up the pieces if we don’t have a plan.
How to Use Twitter and Facebook for Your Business
Many people have asked me how I use social media for my business. While I do not consider myself an expert in this area, I am happy to share this information to help other business owners navigate social media.
Getting Started
• Sign up for an account at http://twitter.com/ and http://www.facebook.com/
• For Facebook, you will need to create a personal account, which you can decide if you want to use for your business or not
• To create a Facebook page for your business, click here http://www.facebook.com/pages/create.php.
• When creating your Twitter or Facebook profile or page, make sure you personalize it, include your picture or business logo and make sure it is interesting. Always link back to your blog or web site.
Twitter
• If you plan on using Twitter at all, you really need to get Tweetdeck. Download it here http://www.tweetdeck.com/beta/.
• You can link Facebook to Tweetdeck but I haven’t done that. I use Tweetdeck to view my friend’s time line, my @replies and my direct messages all at once. I have also set up searches for “Cornwall, Ontario” and other terms related to my areas of interest so I can see tweets that mention the things I am interested in.
• To find people to “follow” on Twitter (and hopefully who will follow you back), use some directory sites like http://wefollow.com/, where you add yourself under categories and then you can search for other Twitter users by category.
• http://www.twellow.com/ is another directory where you can search Twitter users by location. It will also suggest followers to you and you can search under other categories.
Facebook
• If you haven’t used Facebook at all, you will need to start adding friends. In the upper right-hand corner, you can search by name. Then, once you get some friends, you can search who their friends are. Once you start gaining friends, Facebook will begin suggesting friends for you. You can let friends know about your business page or use your personal page as your business page, or do a combination of both.
• Use your business page (or your personal page if applicable) to create events relating to your business and invite friends. Add blog posts or articles of interest that relate to your business and share them with friends or with your page fans. People can’t refer to you or use your services if they don’t know what you do.
• Once you have a certain amount of fans, you can get a vanity url on Facebook. You should be able to get a personal one right away. Just go to http://www.facebook.com/username/ to set yours. Mine is www.facebook.com/mallinotte.
What do I talk about?
• You can talk about anything really, but you will get the most out of Facebook and Twitter if you give content of value. Start a blog and link to your blog. Your blog can be about your business, it can be about you, it can be about a topic related to your business, or it can be about something completely unrelated, although you need to mention your business occasionally for it to have some value.
• As I said earlier, I use social media to promote events related to my business. Some businesses create contests or have special promotions or coupon codes for their friends, fans or followers.
• You can also use Twitter and Facebook to connect directly with your target audience, to ask them questions, seek feedback, et cetera. That kind of interaction is invaluable for business owners.
• When looking for articles to share, use Google Reader to follow blogs of interest to you, download it here www.google.com/reader. You can also subscribe to blog feeds via email, but Google reader allows you to set up alerts on certain search terms (including your own name or business name) and it will search the internet for that term and give you the link in your Google reader. You can check your reader a couple of times a week for new content. A tutorial for Google reader is available here http://www.google.com/support/reader/?hl=en.
• I also use the searches I have in Tweetdeck to find information to “retweet”.
How do I make it happen by doing only one update?
• To fully integrate your social media, you need to get a Ping account at http://ping.fm/. Then you add your social media accounts to your Ping account. When you update Ping, it updates everything.
• You may not need this right away, but I highly recommend Tweet Later, which is now called Social Oomph http://www.socialoomph.com/. You can create a free account which will allow you to schedule tweets and track certain keywords that are used in Twitter. For me, the real value comes in with the Professional account, which is $20.00 per month but allows me to update all of my social media accounts at once. I put in information and it goes to Twitter, Facebook and Linked In. There are many other advantages of the professional account which I haven’t even explored yet.
• If you use Social Oomph professional, you then can add your Ping account there to schedule your updates to be added to Ping at regular intervals, which will in turn add them to all of your social media accounts.
New age of social networking – The Cornwall Standard Freeholder, August 14, 2009
New age of social networking
Posted By DAVID NESSETH
CORNWALL – Social networking sites like Facebook and Twitter have helped one local lawyer put a human face to a profession often accused of being heartless.On her Facebook group called Your Cornwall Lawyer, Michele R. J Allinotte explains to visitors that she’s “not your parents’ lawyer”. In fact, she says, she’s not like any lawyer you’ve ever met.
“Part of me as a professional is that I am accessible,” says Allinotte, who specializes in estate planning and business law. “I will share personal information or use my grandparents or kids as an example. Clients or referral sources that know me on Facebook as well get to see that side of me, that I’m a real person. I’m easy to get along with, I have a farm and I shovel manure.”
Now, Allinotte is leaving her current firm in Cornwall to strike out on her own. Part of this vision, she says, is to further utilize social networking tools.
The 33-year-old has snagged a couple of clients from her Facebook presence. Sometimes appointments are even booked through the site.
Allinotte believes that some people are more comfortable initiating contact online than on the phone or in person. Lawyers, she admits, can be intimidating, but that’s not her style.
“I didn’t become a lawyer to meet someone once, hand them documents, then never see them again,” she says.
Allinotte often uses Twitter, where she’s MAllinotte, or Facebook, to promote her upcoming seminars or offer links to legal discussions that may be of interest to clients and other lawyers who check her postings.
Currently, her networking accounts promote a planning session that explains how parents can protect their family in the event of their deaths.
She has 834 people following her Twitter updates, and 35 fans of her Facebook group.
CITY JOINS FACEBOOK Bob Peters, the city’s economic development officer, says he’s heard of Allinotte, but only through Facebook. She’s a friend of friends, he said.
Three months ago Peters launched a Facebook group for the City of Cornwall.
It grew quickly. Within one week, “City of Cornwall, Ontario” had 177 members, and it has since grown to about 1,190 members.
“The potential far exceeds where it is now,” Peters said of the group.
But he’s working on it.
Peters has his eye on Brockville’s group, which has more than 3,000 members, yet less than half the population of Cornwall.
“It’s not a competition, but we do have 46,000 people here,” Peters said.
Peters has been keeping an eye out for some great Cornwall photos on Facebook. He’s even used some for the Choose Cornwall economic development website.
Peters said one of the main uses of the city’s Facebook presence is to keep people informed about upcoming events. While these events are also posted on the city’s website, Peters said Facebook gives users the opportunity to see specific events that their online friends plan to attend.
Currently, the city is promoting a knowledge workshop on brownfield redevelopment.
On the group’s wall, Peters said online users can find all kinds of tidbits about the Seaway City.
Often, people are able to network and make connections through the Cornwall group, he said.
“It’s like people sitting around a local pub and overhearing something you could use in your business,” Peters said.
One of the things that’s most surprised Peters about the Cornwall group has been its ability to fend off trollers, or comments out of line with the group’s positive approach.
Peters said he won’t let the Cornwall group become an advertisement vehicle for local businesses, but would allow them to promote special events connected to their business.
Peters says he wants to keep the city’s group light yet professional.
This article was originally published on August 14, 2009 in The Cornwall Standard Freeholder. Click here to view it.
