Podcast Show Notes:

Introduction:

Kathy and Becca delve into essential planning considerations for late-stage business owners in this episode of Small Bites of Business Insights.

Highlighting the importance of estate planning, charitable planning, transition planning, and legacy planning for late-stage business owners.

Estate Planning for Late-Stage Business Owners:

Emphasizes the need for a comprehensive estate plan, focusing on treating children fairly or equally when the largest asset is the business.

Discusses strategies like bifurcating real estate from the business or restructuring stock classes to ensure equitable distribution.

Charitable Planning:

Explores tax advantages in charitable planning, showcasing how a charitable beneficiary for assets like an IRA can minimize tax implications and benefit charitable organizations.

Transition Planning:

Stresses the significance of transition planning, whether it's a sale, passing on the business, or changing ownership.

Advocates for careful planning to ensure the smooth transition of the business and its assets, addressing concerns of employees and future generations.

Sophisticated Wealth Transfer Strategies:

Explains complex wealth transfer strategies, highlighting valuation discounts and minority interest transfers to optimize the use of exemption amounts and facilitate business succession.

Legacy Planning:

Encourages the creation of a family constitution and storytelling about the wealth's origin, values, and intended use for future generations.

Suggests co-investing, forming charitable foundations, or engaging in meaningful family discussions to maintain family unity and shared responsibility for the wealth legacy.

Conclusion:

Reiterates the importance of careful planning and strategic considerations for late-stage business owners to ensure a smooth transition and a lasting family legacy.

Hosts:

Dr. Kathy Gosser, YUM! Assistant Professor of Franchise Management and Director of the Yum! Center for Global Franchise Excellence

www.business.louisville.edu/yumcgfe

Rebecca McDade, JD - Attorney

https://www.linkedin.com/in/rebecca-mcdade-86b8407a/

Podcast Show Notes

Introduction:

Kathy and Becca discuss essential planning considerations for mid-stage business owners.

Recap of the early stage planning, emphasizing the need for a basic estate plan.

Key Points:

Estate Planning for Mid-Stage Business Owners:

Mid-stage business owners need a comprehensive estate plan, including a will, revocable trust, powers of attorney for health care and property, and an advanced directive.

Emphasizes the importance of revisiting an existing estate plan to accommodate changes in family dynamics, business growth, and assets.

Reviewing Liquidity Buckets and Financial Goals:

Encourages mid-stage business owners to review liquidity reserves and assess financial goals.

Discusses the significance of maintaining an emergency fund and considering education funds for children and grandchildren.

Wealth Transfer Strategies:

Advises considering wealth transfer strategies, especially due to the impending reduction in the exemption amount in 2026.

Highlights gifting business interests to children as a viable strategy, emphasizing the importance of responsible wealth transfer.

Retirement Planning:

Recommends evaluating and possibly enhancing retirement plans for mid-stage business owners, considering the potential longevity and health.

Discusses options for robust retirement plans beyond IRAs to secure a comfortable retirement.

Business Transition Planning:

Explains business transition planning and the various ways to transition a business, including gifting, selling, or a combination of both.

Emphasizes the importance of ensuring a smooth transition, adequate compensation for employees, and evaluating key employees' roles.

Preparedness for Unexpected Events:

Advocates for being prepared for unexpected events, emphasizing the importance of ensuring the business remains sustainable in the absence of the owner.

Conclusion:

Reiterates the significance of strategic planning and preparation for mid-stage business owners to secure their business and financial future.

Hosts:

Dr. Kathy Gosser, YUM! Assistant Professor of Franchise Management and Director of the Yum! Center for Global Franchise Excellence

www.business.louisville.edu/yumcgfe

Rebecca McDade, JD - Attorney

https://www.linkedin.com/in/rebecca-mcdade-86b8407a/

Podcast Show Notes

In this episode of "Small Bites of Business Insights," Becca and Kathy delve into crucial aspects of wealth planning for early stage business owners. Here's a summary of their discussion:

Importance of Basic Estate Planning:

Establishing a will and a revocable trust helps control asset distribution and ensures assets go to intended beneficiaries.

Essential elements include powers of attorney for healthcare and property, and an advanced directive.

Building Liquidity Buckets:

Emergency fund: 6 to 12 months' worth of living expenses for unexpected circumstances.

Midterm and long-term goals: Saving for future plans like home purchase, education, or retirement.

Retirement planning: Establishing 401(k), SEP IRA, or IRAs to secure post-retirement financial stability.

Understanding Asset Titling:

Exploring various ways of holding assets, such as in an individual's name, joint tenancy, trusts, or business entities.

Choosing the right titling method can impact transfer taxes, probate avoidance, and creditor protection.

Choosing the Right Business Entity:

Assessing business risks, tax implications, creditor protection, wealth transfer strategies, and operational activity to determine the most suitable business structure (e.g., LLC, partnership, C corp, S corp).

Insurance for Business Owners:

Life insurance can assist in cash flow management, fund business buyouts, or create wealth for equalizing asset distribution among beneficiaries.

Long-term care insurance is vital for covering medical needs, especially during later stages of life, to preserve business and other personal assets.

Planning for Generational Wealth:

Emphasizing the importance of sound planning to secure and pass on wealth across generations while maintaining financial stability for the family and the business.

Seeking Professional Guidance:

Recommending consulting with estate planning attorneys and corporate attorneys to structure business entities effectively and ensure comprehensive financial planning.

The episode sheds light on fundamental aspects of wealth planning that every early stage business owner should consider. Stay tuned for the next episode, where they'll discuss mid-stage business planning.

Hosts:

Dr. Kathy Gosser, YUM! Assistant Professor of Franchise Management and Director of the Yum! Center for Global Franchise Excellence

www.business.louisville.edu/yumcgfe

Rebecca McDade, JD - Attorney

https://www.linkedin.com/in/rebecca-mcdade-86b8407a/

Podcast Show Notes:

Introduction:

Welcome to "Small Bites of Business Insights," where today's episode delves into the world of wealth planning, focusing specifically on transfer taxes and how they play a crucial role in managing assets and legacies.

Becca is the guest in this episode, providing valuable insights and explanations regarding transfer taxes and how they can impact individuals' financial planning.

Understanding Transfer Taxes:

Transfer taxes are levies imposed on assets being transferred to others, either as gifts during one's lifetime or through inheritance after death.

Key transfer taxes discussed are the gift tax, estate tax, and GST (Generation-Skipping Transfer) tax.

Gift Tax:

The gift tax applies to transfers made during an individual's lifetime.

A 40% tax rate is applied to the value of the gift, with exemptions allowing up to $17,000 per recipient annually without tax implications.

The lifetime exemption for gift tax is $12.9 million per person.

Estate Tax:

The estate tax applies to transfers made upon an individual's death.

A 40% tax rate is applied to the taxable estate, but the beneficiaries are not directly responsible for this tax; it is paid from the estate's assets.

The lifetime exemption for estate tax is also $12.9 million per person.

Generation-Skipping Transfer (GST) Tax:

The GST tax is an additional 40% tax imposed on top of the gift or estate tax.

It applies when transferring assets from one generation to a skip generation, such as from a grandparent to a grandchild.

The lifetime exemption for GST tax is also $12.9 million.

Ways to Minimize Transfer Taxes:

Utilize the annual exclusion by gifting up to $17,000 per person each year.

Make unlimited gifts for education and medical expenses directly to educational institutions or medical providers.

Maximize the lifetime exemption of $12.9 million for both gift and estate taxes.

Utilize the marital deduction, allowing unlimited transfers to a spouse without tax consequences.

Implement wealth transfer strategies such as GRATs, GRITs, and SLATs to leverage exemptions and minimize tax burdens.

Conclusion:

Becca emphasizes the importance of strategic estate planning to maximize exemptions, minimize taxes, and preserve assets for future generations.

Future episodes will explore wealth transfer strategies and their relevance, especially for business owners, providing a comprehensive understanding of effective wealth planning.

Hosts:

Dr. Kathy Gosser, YUM! Assistant Professor of Franchise Management and Director of the Yum! Center for Global Franchise Excellence

www.business.louisville.edu/yumcgfe

Rebecca McDade, JD - Attorney

https://www.linkedin.com/in/rebecca-mcdade-86b8407a/

Podcast Show Notes

Introduction:

In this episode of "Small Bites of Business Insights," Becca is back with the host to delve deeper into estate planning basics, focusing on crucial aspects like power of attorney, advanced directives, living wills, and a brief touch on transfer taxes.

Power of Attorney for Property:

A power of attorney for property is a legal document that grants someone the authority to manage your property and assets in case you become disabled or incapacitated during your lifetime.

The agent named in the document can handle financial affairs, pay bills, manage mortgages, and run businesses on behalf of the individual.

Choosing a financially savvy and trustworthy agent is vital, often being a spouse, adult children, or a responsible family member.

Power of Attorney for Health Care:

The power of attorney for health care allows an individual to designate an agent to make medical decisions in case of incapacity.

The agent, often a spouse or family member, must make decisions aligning with the individual's medical preferences, making communication and understanding crucial.

Modern versions of this document may require specific instructions regarding medical conditions and treatments, including life-sustaining measures.

Advanced Directives and Living Wills:

Advanced directives or living wills focus on an individual's choice regarding life-sustaining treatment and medical decisions.

It allows individuals to express their preferences for or against life-sustaining interventions under various medical circumstances.

This document offers a clear declaration of one's choices, providing control over critical medical decisions when an individual is of sound mind.

Organ Donation and Advanced Directives:

Advanced directives often include a section regarding organ donation preferences, allowing individuals to express their wishes in this regard.

If an individual values organ donation, appropriate provisions can be made within the advanced directive or through the Secretary of State's office.

Teaser on Transfer Taxes:

Transfer taxes, assessed by the IRS, are levies imposed on an individual's right to transfer assets to beneficiaries during their lifetime or at death.

A future episode will explore transfer taxes in detail, given its complexity and importance in estate planning.

Conclusion:

Becca provides valuable insights into power of attorney, advanced directives, and living wills, shedding light on their significance in estate planning.

Stay tuned for the next episode, where the discussion will delve deeply into the intricate realm of transfer taxes, an essential aspect of effective estate planning.

Hosts:

Dr. Kathy Gosser, YUM! Assistant Professor of Franchise Management and Director of the Yum! Center for Global Franchise Excellence

www.business.louisville.edu/yumcgfe

Rebecca McDade, JD - Attorney

https://www.linkedin.com/in/rebecca-mcdade-86b8407a/

Podcast Show Notes

Welcome to "Small Bites of Business Insights" where we continue the discussion on wealth planning, focusing on estate planning basics and delving into trusts.

Becca returns as a guest to discuss trusts and their advantages over wills in estate planning.

Trust vs. Will:

A trust is a living document effective upon creation, while a will takes effect after one's passing.

Trusts offer privacy, avoiding probate and keeping asset distribution details confidential.

Setting Up a Trust:

A living trust or revocable trust is created during one's lifetime for asset distribution upon death.

While online platforms like LegalZoom offer trust creation, due to complexity, consulting an estate planning attorney is advised.

Legal Changes and Tax Implications:

Estate laws constantly evolve, making estate planning a specialized and ever-changing field.

Tax implications for estate planning remain similar whether using a will or a trust, but differences arise with irrevocable trusts.

Irrevocable Trusts:

Irrevocable trusts are unchangeable after creation, often used for gifting assets during one's lifetime while retaining control through a trustee.

They provide protection from creditors and divorces, benefiting both the creator and the beneficiaries.

Control and Parameters in Trusts:

Trusts offer control from the grave, enabling creators to set conditions and guidelines for distributions to beneficiaries.

Trustees play a critical role in managing the trust, making investment decisions, and adhering to specified parameters.

Selecting a Trustee:

A trustee can be a family member, a friend, or a professional entity, based on the complexity and nature of the trust.

Estate planning attorneys help in choosing suitable trustees and setting compensation parameters.

Conclusion:

Becca provides comprehensive insights into trusts, emphasizing their advantages over wills in estate planning.

Tune in to the next episode where the discussion will cover crucial aspects of estate planning like power of attorney for property and healthcare.

Hosts:

Dr. Kathy Gosser, YUM! Assistant Professor of Franchise Management and Director of the Yum! Center for Global Franchise Excellence

www.business.louisville.edu/yumcgfe

Rebecca McDade, JD - Attorney

https://www.linkedin.com/in/rebecca-mcdade-86b8407a/

Podcast Show Notes:

Introduction:

Welcome to the first episode of "Small Bites of Business Insights" focusing on Wealth Planning and Estate Planning with special guest Becca.

The episode delves into the basics of estate planning, aiming to educate listeners in three parts.

Estate Planning Basics:

Estate planning involves determining how assets are distributed to beneficiaries after the individual's passing.

It includes wills and trusts, allowing one to specify asset distribution and whether it occurs immediately or through trusts.

Is Estate Planning Only for the Wealthy or Older Individuals?

Estate planning isn't exclusive to the wealthy or elderly; it's about deciding how to distribute assets, regardless of wealth.

Without an estate plan, state laws decide asset distribution, which may not align with personal preferences.

Concerns Regarding Lack of Estate Planning:

Without an estate plan, state laws determine asset distribution, often resulting in unintended outcomes.

Effective estate planning helps minimize taxes, ensuring more wealth goes to family rather than to the government.

Understanding Wills:

A will, created during one's lifetime, dictates asset distribution upon death, often involving the probate process.

Probate involves transferring assets from the deceased individual to beneficiaries through a court-supervised process.

Executor and Guardian:

The executor administers the estate after one's passing, overseeing tasks like tax filing and asset distribution.

A guardian cares for minor children in case both parents pass away, ensuring their well-being and managing any inherited assets.

Probate Process:

Probate is the legal process of transferring assets from the deceased to beneficiaries, involving court oversight.

Assets are collected, debts settled, and assets then distributed according to the deceased individual's will.

Joint Tenancy and Alternatives:

Joint tenancy can bypass probate by automatically transferring assets to the surviving joint owner.

However, more complex estates might benefit from a revocable trust to avoid probate effectively.

Conclusion:

Becca provides valuable insights into estate planning, emphasizing the importance of taking control of asset distribution through proper planning.

Stay tuned for the next episode, where the discussion will delve deeper into the world of trusts in estate planning. stage business planning.

Hosts:

Dr. Kathy Gosser, YUM! Assistant Professor of Franchise Management and Director of the Yum! Center for Global Franchise Excellence

www.business.louisville.edu/yumcgfe

Rebecca McDade, JD - Attorney

https://www.linkedin.com/in/rebecca-mcdade-86b8407a/