You Are Not Immortal - Have a Plan in Place

While many of us like to think that we're immortal, the only two things in life that are certain are death and taxes, to paraphrase Ben Franklin. Not only is it important that you have a plan in place in the unlikely event of your death, but you must also implement your plan and make sure others know about it and understand your wishes. Lest, as Franklin also said, "by failing to prepare, you are preparing to fail."

If you've procrastinated on your estate planning, here's a list of tasks to get you going in the right direction:

Must-do No. 1: Inventory physical items.
Go through your home and make a list of all items worth $100 or more. Examples include the home itself, television sets, jewelry, collectibles, vehicles, guns, computers/laptops, lawn mower, power tools and so on.

Must-do No. 2: Inventory non-physical items.
Add up your non-physical assets. These include things you own on paper or other entitlements, including brokerage accounts, 401k plans, IRA assets, bank accounts, life-insurance policies and all other insurance policies such as long-term care, homeowners, auto, disability, health and so on.

Must-do No. 3: Make a list of credit cards and debts.
Make a list of open credit cards and other debts. This should include auto loans, existing mortgages, home equity lines of credit, open credit cards with and without balances and any other debts. A good practice is to get a free credit report once a year and make sure you close out any credit cards that are no longer in use.

Must-do No. 4: List organizations you belong to and charities you support.
If you belong to organizations such as AARP, The American Legion, veterans' associations, AAA auto club, college alumni groups, etc., you should make a list of these. Include any other charitable organizations that you proudly support or make donations to. In some cases, several of these organizations provide accidental-death life insurance benefits (at no cost) for their members and donors, and your beneficiaries may be eligible. It's also a good idea to let your beneficiaries know which charitable organizations are close to your heart.

Must-do No. 5: Send a copy of your lists of assets to your estate administrator.
When your lists are completed, you should date and sign them and make at least three copies of each. The original should be given to your estate administrator (we'll talk about him or her later), the second copy should be given to your spouse or another loved one and placed in a safe deposit box, and the last copy you should keep for yourself in a safe place.

Must-do No. 6: Review IRA, 401k and other retirement accounts.
Accounts and policies in which you list beneficiary designations pass via "contract" to the person or entity listed at your death. It doesn't matter how you list these accounts and policies in your will or trust, because the beneficiary listing will take precedence. Contact a customer-service representative or your plan administrator for a current listing of your beneficiary selection for each account. Review these accounts to make sure the beneficiaries are listed correctly.

Must-do No. 7: Update life insurance and annuities.
Life insurance and annuities will pass by contract as well, so it's important to contact all life-insurance companies with which you maintain policies to ensure that your beneficiaries are listed correctly.

Must-do No. 8: Assign transfer-on-death designations.
Many accounts, such as bank savings, CD accounts and individual brokerage accounts are unnecessarily probated every day. Probate is a costly and avoidable court process in which assets are distributed according to court instruction. Many of the accounts listed above can be set up with a transfer-on-death feature to avoid the probate process. Contact your custodian or bank to set this up on your accounts.

Must-do No. 9: Select a responsible estate administrator.
Your estate administrator will be responsible for following the rules of your will in the event of your death. It is important that you select an individual who is responsible and in a good mental state to make decisions. Don't immediately assume that your spouse is the best choice. Think about all qualified individuals and how emotions related to your death will affect this person's decision-making ability.

Must-do No. 10: Create a will.
Everyone over the age of 18 should have a will. It is the rule book for distributing your assets, and it could prevent havoc among your heirs. Wills are fairly inexpensive documents to draft. Most attorneys can help you with one for less than $1,000. If that's too rich for your blood, there are several good will-making software packages available online. Just make sure that you always sign and date your will, have two witnesses sign it and obtain a notarization on the final draft.

Must-do No. 11: Review and update your documents.
You should review your will for updates at least once every two years and after any major life-changing events (such as marriage, divorce or birth of child). Life is constantly changing, and your inventory list is likely to change from year to year, too.

Must-do No. 12: Send copies of your will to your estate administrator.
Once your will is finalized, signed, witnessed and notarized, you'll want to make sure that your estate administrator gets a copy. You should also keep a copy in a safe-deposit box and another in a safe place at home.

Must do No. 13: Visit a financial planner or estate attorney.
While you may think that you've covered all avenues, it's always a good idea to have a full investment and insurance plan done at least once every five years. If you're not looking to spend the money for professional help, there are several good books out there on getting your financial plan and estate in check. As you get older, life throws new curveballs at you, such as considerations for long-term care insurance and protecting your estate from a large tax bill or lengthy court processes. Tips like having an emergency medical contact card in your purse or wallet are little things that many people never think of.

Must-do No. 14: Initiate important estate-plan documents.
Procrastination is the biggest enemy of estate planning. While none of us likes to think about dying, the fact of the matter is that improper or no planning can lead to family disputes, assets going into the wrong hands, long court litigations and huge amounts of dollars in federal tax. At minimum, you should create a will, power of attorney, health care surrogate, trusts and living will, and assign guardianship for your kids and pets. Also make sure that all concerned individuals have copies of these documents.

Must-do No. 15: Simplify your life.
If you've changed jobs over the years, it's likely you have several 401k-type retirement plans still open with past employers or maybe even several different IRA accounts. While this normally won't create a big problem while you're alive (except lots of additional paperwork and account management), you may want to consider consolidating these accounts into one individual IRA account to take advantage of better investment choices, lower costs, a larger selection of investments, more control and less paperwork/easier management when assets are consolidated.

Must-do No. 16: Take advantage of college funding accounts.
The 529 plan is a unique tax-advantaged investment account for college savings. In addition, most universities do not consider 529 plans in the financial aid/scholarship calculation if a grandparent is listed as the custodian. The really nice feature is that growth and withdrawals from the account (if used for "qualified" education expenses) are tax-free.

Now you have the ammunition to get a pretty good jump-start on reviewing your overall financial and estate picture; the rest is up to you. While you're sitting around the house watching your favorite sports team or television show, pull out a tablet or laptop and start making your lists. You'll be surprised how much "stuff" you've accumulated over the years. You'll also find that your inventory and debts lists will come in handy for other things, such as homeowners insurance and getting a firm grip on your expenses.

Courtesy of MSN Money

Smart Tips for New Small Businesses

Save up as much money as possible before starting.
All too often, people go into business without any savings, exclusively using loan money from friends, banks, or the SBA. They except to be able to start paying the loans back right away with their profits. What these business owners don't realize is that it can take months or years to make a profit. And once a lender discovers a business isn't as profitable as expected, the lender is likely to call in the loan or refuse to renew it for another year. Often new business owners then have to take out home equity loans or use credit cards to pay off their loans (which puts their home and credit rating at risk).

A better plan is to save up as much of the needed investment money as possible, including your living expenses for the first year, or even two. Odds are that your business won't be profitable for one to two years. Even if you get plenty of business coming your way -- and your customers pay you on time, which isn't always a sure thing -- you'll want to be able to invest most of that money back in the business for space, equipment, advertising, and insurance needs.

Start on a shoestring.
Think small. Don't rent premises if you can work somewhere else, and don't hire employees until you can keep them busy. (You can hire independent contractors or temps in the meantime.)

People who start their small business on the cheap, often in a garage, den, or some other scavenged space, and create their first goods or services with more sweat than cash, have the luxury of making their inevitable rookie mistakes on a small scale. And precisely because their early screw-ups don't bury them in debt, they are usually able to learn and recover from them.

Protect your personal assets.
When you go into business for yourself, you are usually personally liable for all judgments and debts that the business incurs. This includes business loans, taxes, money owed to suppliers and landlords, and any judgments against the business as a result of a lawsuit. If you don't protect yourself, a creditor can go after your personal assets, such as your car and your house, to pay for these debts.

While you can protect yourself against lawsuits by buying business liability insurance, this won't help you with business debts. If you will be running up big debts, consider forming a corporation or limited liability company (LLC). Just one person can form either of these types of businesses.

Understand how -- and if -- you will make a profit.
You should be able to state in just a few sentences how your business plans to make a substantial profit. For starters, you need to know your costs: how much you'll spend purchasing inventory, paying the rent, compensating any employees, and covering what is likely to be a surprisingly long list of other costs. Then you can figure out exactly how much you need to sell each month, for how many dollars, to cover those expenses and have an adequate profit besides. These numbers are all you need to create a "break-even analysis."

Make a business plan, no matter how short.
Understanding your profit numbers and creating a break-even analysis is the first step in making a business plan. For most small companies, the key portions of a business plan are the break-even analysis, a profit-and-loss forecast and a cash flow projection. (Projecting your cash flow is key and will make or break your company: Even if your business is getting plenty of work or selling its products, if you're not getting paid for 90-180 days, you're not going to survive unless you've planned for it.) With a cash flow spreadsheet in place, as well as a profit-and-loss forecast, you can tinker with your business idea and improve it before you start -- and continue to use them after you start.

Creating a business plan also allows you to determine what your projected start-up costs are (how much money you'll need to save) and what you marketing strategies are (how you'll reach customers to make sales). If you can't make the numbers work on paper, you won't be able to make them work in real life.

Get and keep a competitive edge.
Building a competitive edge into the fabric of your business is crucially important to long-term success. Some ways to get this edge are by knowing more than your competitors, making a product that is hard or impossible to imitate, being able to produce or distribute your product more efficiently, having a better location, or offering superior customer service.

One way to hold on to your competitive edge is to protect your trade secrets -- confidential information that gives you a competitive advantage in the marketplace. Examples of trade secrets include customer lists, survey methods, marketing strategies, and manufacturing techniques. To protect your trade secrets under the law, you need to take steps to keep the information confidential. This includes marking documents "Confidential," using passwords to protect computer information, using nondisclosure and/or noncompete agreements, and limiting access to employees with a reasonable need to know the trade secrets.

Another way to keep your competitive edge is to react quickly to bad news. Once you see that your business faces some kind of adversity, you need to come up with a plan to deal with it immediately. This may involve moving your offices, introducing a new product or service, or developing a better way to reach customers.

Put all agreements in writing.
The laws of your state require you to put some contracts and agreements in writing:

• Contracts that will last longer than a year.
• Contracts that involve the sale of goods worth $500 or more.
• Contracts that transfer the ownership of copyrights or real estate.

Even if not legally required, it's wise to put almost everything in writing, because oral agreements can be difficult or impossible to prove. This includes leases or rental agreements, storage agreements, contracts for services (such as consulting or electrical work), purchase orders or contracts for goods worth more than a couple hundred dollars, offer letters of employment, and employment policies. Get in the habit of getting and giving receipts for all goods, services, and deposits, regardless of how much.

Hire and keep good people.

Your goal should be to hire and retain truly excellent employees -- not just reasonably competent ones. A highly competent and truly enthusiastic employee is at least two and sometimes even three times as valuable as a person of average skills.

To create a stable and happy workforce, it's essential not only that your employees (and independent contractors) believe they are being fairly treated, but that your business is worthy of respect. Employees and contractors who like their work will represent you well on and off the job. And customers will more likely be loyal to an upbeat business -- and are more likely to recommend it to their friends.

Pay attention to the legal status of your workers.
When you hire workers as independent contractors, make sure they shouldn't really be taxed as employees. The IRS can impose substantial penalties against you for not withholding taxes and paying taxes for a worker who is really an employee. The IRS and other agencies are likely to think that a worker is an employee rather than an independent contractor under any of these conditions:

• The worker works full-time or nearly full-time for you.
• The worker doesn't work for anyone else.
• The worker provides services that are an integral part of your operations.
• You control how the worker does the job and provide detailed instructions and training for the worker.

One way to help avoid trouble is to have the worker sign a written service contract, or independent contractor agreement.

Most employees you hire will be "at-will" employees -- subject to being fired at any time and for any reason (except for illegal motives such as discrimination). It's important to preserve your at-will rights because they protect you from having to prove that you have a valid business-related reason to terminate an employee. Don't make any promises to prospective or current employees that you are offering a permanent job or that they will lose their job only if they perform poorly, because this will limit your ability to terminate the employee for other reasons, such as personality conflicts or finances.

When hiring an at-will employee, have the employee sign an offer letter that makes it clear that the employment relationship is at will. Except for high-level executives, you shouldn't have employees sign an employment contract -- this can limit your ability to alter the terms of employment as your business needs change and subjects you to higher legal standards.

Pay your bills early and your taxes on time.
In the real world, where a reputation for keeping one's word is a hugely important asset, a good strategy is either to pay your bills up front or pay them early. You gain trust, build a positive credit profile, and have a built-in safety net if things go badly. These benefits outweigh any interest you might earn by holding onto your money until the last possible minute.

Most importantly, pay your payroll taxes on time, especially the portion that you withhold from your employees' paychecks. The IRS and state tax authorities can hold you personally liable for these taxes, plus stiff penalties, if they're not paid. This is true even if you operate your business as a corporation or LLC or if your business goes bankrupt -- you will still be personally and legally on the hook to pay back payroll taxes.

Have you started a business and made a mistake that could have been prevented? Help others by sharing your story below...

Starting a Business? Must Know Employment Laws

Start-ups and emerging companies are frequently the targets of lawsuits by employees and former employees. Investors and board members can be personally liable in certain situations and these claims can result in losses that can ruin an investor’s investment and cripple a start-up. Entrepreneurs need to know the important steps they must take before hiring employees or independent contractors to stay in compliance with the law.

The following are some tips for start-ups to help minimize the threat of litigation and protect their intellectual property assets.

Be Careful Hiring Independent Contractors
Most people who perform work for a company have to be classified as employees. Only those who meet stringent legal tests can be hired and paid as Independent Contractors. Generally, the person must have an independently established business, do work for others, be paid on other than a salary or hourly basis, be free from direction and control of the employer, provide their own tools and workspace, etc. If these tests are not met, the contractor will be considered legally to be an employee and be eligible for benefits, overtime, worker’s comp, etc. This can be a very costly error for a company to make.

Have a Confidentiality / Non-Disclosure Agreement

Many businesses succeed because of a unique or novel idea, device, method, formula, technique, process or business model. Protecting this confidential information is critical for most businesses. However, many start-up and emerging companies overlook this significant risk by not obtaining a confidentiality/non-disclosure agreement from employees or contractors. A confidentiality/non-disclosure agreement helps establish protection for certain types of information under state trade secrets acts, and can protect other information under contract principles.
The confidentiality/non-disclosure agreement should state with specificity the types of information the company considers its confidential and proprietary information, i.e. cost data, customer lists, general financial data, inventions, product specs, etc. The agreement should also specify the circumstances under which the confidential and proprietary information can be used (i.e. in furtherance of the company’s business) and should prohibit any other use or disclosure of such confidential or proprietary information.

Consider a Non-Compete or Non-Solicitation

In some states, such as Oregon and California, there are stringent restrictions or prohibitions on non-compete agreements. In other states, such agreements are easier to obtain, but still certain precautions must be taken. First evaluate whether a non-compete or non-solicitation is needed for your business and if so, for which employees and in which states. The agreement should be carefully drawn and approved by legal counsel.

Hire the Best Employee

To find the best applicants for a particular job, the employer needs to use some creative advertising methods. Don’t just advertise in-house or through the local newspaper or one on-line source. Consider advertising in national or regional professional or trade journals, minority newspapers or magazines. Use a headhunter if needed. Contact local colleges or specialty trade and business schools. If your recruiting plan is narrow, you will not get the most diverse and best-qualified applicant pool.

Understanding and Dealing with Discrimination and Harassment

Discrimination is making decisions based on differences. Not all discrimination is illegal. Discrimination is illegal in the employment context when an employer makes an employment decision impacting the terms or conditions of employment – hiring, promotion, demotion, firing – on the basis of that employee’s membership in a protected class – disabled, male, female, black, white, etc. Harassment is when a work atmosphere is not free from treatment based on protected class status. It does not matter if it makes the employee blush, cry, smile or quit – it is still harassment, and it can still get you in trouble.

• Employers can prevent harassment by:
• Enforcing the company anti-harassment policy
• Talk about the policy on a regular basis in meetings
• Remind employees how to report harassment
• Stop harassing behavior whether someone objects or not
• Do not engage in any improper behavior yourself

Employers must promptly respond to all complaints of harassment. Even if the employer has not received a complaint, but supervisor or management personnel suspects that harassment is occurring within the workplace, the employer should respond swiftly, even if the complaint is vague or mentioned off-hand; even if the complainant says he/she doesn’t want you to do anything; you must act.

Provide a Policy Handbook

There are certain laws that require notice to employees. This is most easily done in an Employee Handbook. Handbooks should include policies regarding:

• “At-will” employment;
• Equal opportunity;
• Harassment and discrimination;
• Leave laws;
• Expressly state that employees are not guaranteed a particular schedule or a minimum number of hours each week or any length of employment;
• Summary of benefits – generally only, plan documents control;
• Required local, state and federal notices/policies/procedures; and
• Work rules/conduct.

Do not include:

• Probationary period;
• Progressive discipline; or
• For “cause” termination.

Discipline and Evaluation of Employees

One of the most difficult and unpleasant tasks of being a supervisor is the task of counseling, coaching and disciplining an employee. Usually coaching is a first step to dealing with performance problems or rule violations. Generally, disciplinary action follows either a clear violation of company policy or prior discussions with the employee about a particular problem. Principles of effective coaching, counseling and discipline are:

• Describe the problem behavior, including what policy is being violated and how the employee’s behavior is impacting the Company and coworkers.
• Explain the disciplinary action you are taking and why.
• If there is an excuse or your facts are challenged, investigate the matter further.
• Clarify future improvements needed and set a specific follow-up date.
• Express your confidence in the employee.
• Document the session, including the employee’s feedback and explanation.
• Copy the documentation to the employee and the file.

Know Wage and Hour Law

Wage and hour law can be complicated and confusing. One of the most common mistakes made by employees is improper classification of employees. Whether or not an employee is entitled to overtime pay depends on whether they are “exempt” or “non-exempt.” There are only three narrow categories of white-collar exemptions with specific criteria required: Executives (supervisors), administrative employees, and professional employees. In addition, outside sales professionals and certain highly paid computer professionals may be exempt. Each job description has to be carefully analyzed against the legal test. The exempt employee must be paid on a bona fide salary basis regardless of hours worked. All other employees are non-exempt and must be paid hourly and paid overtime.

Train Your Managers and Supervisors

Nothing causes companies more employment-related headaches than mistakes by front line managers and supervisors. Train every manager or supervisor to:

• Properly interview an applicant (including what not to ask).
• Ensure that all paperwork on a new employee is properly completed and submitted at time of hire (job application and resume, minor work permits, U-4’s, I-9’s, signed Handbook Acknowledgement form).
• Properly discipline and regularly evaluate employees.
• Don’t tolerate what is inappropriate workplace conduct (not “just” harassment and discrimination, but also conduct that is unprofessional, immature, or indicates a lack of anger control).
• Know how and when to document inappropriate workplace conduct, report it, investigate it; and preserve any evidence.
• Know how to report any work-related injuries or incidents (slip and falls, assaults, shopliftings and robberies) and preserve evidence.
• Be familiar with wage and hour issues.
• Consistently treat employees equally.
• Memorize the following mantra when it comes to counseling and coaching employees: IF IT ISN’T WRITTEN DOWN, IT DIDN’T HAPPEN (document, document, document!).
• Memorize part II of the mantra: IF IT IS WRITTEN DOWN, MAKE SURE IT’S ACCURATE, only facts (not legal conclusions), dates, times, names, conduct, penalties, notice to employee of what will happen in the future).
• Know when to call an H.R. consultant or legal counsel.

How to Terminate

If an employee is not meeting expectations or completing a corrective action plan, do not be afraid to terminate the employee. If your performance evaluations and corrective action plans have been done properly, it can be a constructive parting for both you and the employee. However, before you decide to terminate an employee, you should carefully consider the decision and circumstances. Make sure your facts are accurate.

• Make sure there are no surprises.
• Be civil, concise, and compassionate.
• Respect the person’s dignity.
• Be truthful when giving the reasons for termination.
• Support your decision with facts and documentation.
• Have a witness present.
• Meet with the employee in a private, controlled environment.
• Retrieve all company property, e.g. laptops, etc.
• Consider having someone escort the employee out of the office.
• Know the rules for final paychecks.
• Cut-off all electronic access.

Does Your Small Business Need an Attorney?

Many small businesses pay too little attention to the legal side of their business, but that can be a big mistake. One wrong move or oversight can put you at risk, jeopardize your company and cast a pall over things for a long time. This isn’t meant to scare you, but to simply put you on the alert to the fact that most times preventive medicine is far less costly and stressful than facing the repercussions of a decision you “thought” was correct.

It may not be apparent, but there are many ways a lawyer can add value to your new business, from keeping you on the legal straight and narrow to providing broader, strategic business advice.

Follow these guidelines, keeping your vision in mind, and you will be ready when it comes to decide on hiring an attorney for your new business.  

To Hire an Attorney Or Not?

The best attorneys prevent problems, help you make key foundational decisions about the structure and organization of your business, and help you make strategic moves and deals that are crucial for your success. If you have lingering questions about the particulars of company structure or are starting a business that you hope will quickly become a large-scale enterprise, you probably should have an attorney guiding you through the startup process. Attorneys understand the legal implications of every kind of new business. They can help you select an appropriate structure and can help you cope with nuances in legal forms and the law that you might overlook. Just imagine finding out a year down the road that you’ve caused yourself grief by omitting some key legal clause or caging yourself into a suboptimal business structure – a sobering thought.

Understand the Specific Legal Needs of Your Business.

Another factor that should help you decide whether you require the services of a lawyer is the nature of your business, products and services.

For example, if you’re starting a business based on some new, high-tech product that you’ve developed, you better have a patent attorney working with you every step of the way. If you’re trying to get your brand trademarked, an attorney specializing in publishing and marketing would be invaluable.

Some kinds of small businesses may be deceiving in this regard. If you have a scarf with a cool design that you want to manufacture and sell in stores, you need to look past the scarf-making and marketing alone.  Make sure that your designs are legally protected, or soon you may see them everywhere. You want to make sure that your intellectual property is rip-off-proof.

Find a Great Attorney for Your New Business.

The best way to find a reliable and trustworthy attorney is through word of mouth. Whether your friends know someone, or your accountant, insurance agent or business partners recommend someone, referral is the best way to go.

Interview a handful of prospective lawyers and make sure you feel comfortable putting your dream in their hands. Small business owners should insist that their attorney has some business experience. Have a list of questions ready and don’t settle. When you’re interviewing, ask them about their fees and billing plans.

Make sure they understand what kind of business you want, and that they have your best interests in mind.

Demand a Lot From Your Attorney.

This is one of those business partnerships where you can anticipate high value-added. In fact, you should reasonably expect your relationship with a good lawyer to deepen and broaden into one of the two or three most important partnerships that you have as an entrepreneur and business owner.
Beyond the legal checklist, attorneys can help you see the broader picture, given their training and experience. A good attorney can provide a whole new spectrum of ideas, contacts and specialists to help you grow your business.

Look for an attorney who’s a deal maker, capable of being an “upside” thinker rather than one who’s only focused on the downside risk. “The worst thing is a lawyer who says, ‘You can’t do that.’ Rather, they should say, ‘You can’t do it that way,’

Expect to Pay Them What They’re Worth.

An attorney’s startup fees will vary depending on the business, size and geographic location, the experience of the attorney, the details of their service, and your financial situation. Some attorneys may be willing to do the first consultation for no charge, but expect to pay at a billable hourly once the meter is running. Some cases may be worked out on a project-fee basis.

The Bottom Line.

Attorneys can be a great source of advice and partnership when you’re starting a business or navigating legal landmines. But make sure you feel comfortable and can afford his / her services before you begin.

Get Ahead of Your Estate Planning

No matter your net worth, it's important to have a basic estate plan in place. Such a plan ensures that your family and financial goals are met after you die.


An estate plan has several elements.
They include: a will; assignment of power of attorney; and a living will or health-care proxy (medical power of attorney). For some people, a trust may also make sense. When putting together a plan, you must be mindful of both federal and state laws governing estates.

Taking inventory of your assets is a good place to start.
Your assets include your investments, retirement savings, insurance policies, and real estate or business interests. Ask yourself three questions: Whom do you want to inherit your assets? Whom do you want handling your financial affairs if you're ever incapacitated? Whom do you want making medical decisions for you if you become unable to make them for yourself?

Everybody needs a will.
A will tells the world exactly where you want your assets distributed when you die. It's also the best place to name guardians for your children. Dying without a will -- also known as dying "intestate" -- can be costly to your heirs and leaves you no say over who gets your assets. Even if you have a trust, you still need a will to take care of any holdings outside of that trust when you die.

Trusts aren't just for the wealthy.
Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of probate court, which administers wills. Some also offer greater protection of your assets from creditors and lawsuits.

Discussing your estate plans with your heirs may prevent disputes or confusion.
Inheritance can be a loaded issue. By being clear about your intentions, you help dispel potential conflicts after you're gone.

The federal estate tax exemption -- the amount you may leave to heirs free of federal tax -- changes regularly.

You may leave an unlimited amount of money to your spouse tax-free, but this isn't always the best tactic.

By leaving all your assets to your spouse, you don't use your estate tax exemption and instead increase your surviving spouse's taxable estate. That means your children are likely to pay more in estate taxes if your spouse leaves them the money when he or she dies. Plus, it defers the tough decisions about the distribution of your assets until your spouse's death.

There are two easy ways to give gifts tax-free and reduce your estate.
You may give up to $13,000 a year to an individual (or $26,000 if you're married and giving the gift with your spouse). You may also pay an unlimited amount of medical and education bills for someone if you pay the expenses directly to the institutions where they were incurred.

There are ways to give charitable gifts that keep on giving.
If you donate to a charitable gift fund or community foundation, your investment grows tax-free and you can select the charities to which contributions are given both before and after you die.

Source CNN Money

Best Practices for Your Business

Today's small business owner is confronted with new business problems and opportunities on a regular basis. Running a company requires the ability to look outside the business for solutions, ideas, and best practices. However, borrowing ideas and best practices can be wrought with danger. Learn what big business already knows about benchmarking best practices and how to effectively borrow or steal ideas, tactics, and strategies.

What is a Best Practice?
A best practice is the process of finding and using ideas and strategies from outside your company and industry to improve performance in any given area.

Big business has used best practice benchmarking over decades and realized billions in savings and revenues in all areas of business operations and sales. Small business can reap even greater rewards from best practices.

Benefits of Best Practices for Small Business
Reduce Costs:
Small companies often do not have the deep financial pockets of big business to "re-invent the wheel". By learning what other companies have successfully done, a small business can save money without testing new ideas.

Avoid Mistakes:
Solving business problems on your own can result in costly errors. Learning what others have done can keep your business in business.

Find New Ideas: 
Adopting the "Not-Invented-Here" attitude can spell disaster for small business. Learn to borrow the best from beyond your company.

Improve Performance:
When your business looks for best practices outside your business, a wonderful thing happens. You raise the bar of performance and set new standards of excellence to propel your company forward. How to Bake a Best Practice Cake?
 The methodology for best practice study is critical. This is where most small businesses fail. It is like baking a cake. You need the exact ingredients and recipe to create the same result. This also applies to business.
 For example, you learn of another retailer running in-store seminars to drive traffic and sales. Instead of rushing out to try the new idea, you'll need the recipe. What results did the retailer achieve? And how did they achieve it?
 After careful, probing you discover the in-store seminars have increased traffic and sales by 6% and 12%, respectively. Also, you find the key ingredient is to make attendance confirmation calls to all the seminar attendees the day before or else attendance drops to zero. After finding all the steps to success than you are ready to effectively implement the idea in your company

Steps for Best Practices

• Identify one business process or service to improve. (Product delivery)
• Look for one metric to measure. (Late Shipment %)
• Find competitors and companies within your industry and outside your industry.
• Collect information on the successful, best practices of other companies.
• Modify the best practice for your situation. 
• Implement the process then measure the results.

Remember to survey companies of all sizes. And the time to complete a best practice study doesn't have to take months. A few weeks of literature research and telephone interviews are often enough for small business.

Do you have examples of best practices that you have used in your business and can share with others? Please share below...

Do Your Homework When Starting Your Business

Avoiding Legal Problems
Arm yourself with basic knowledge of business law so you're alert to your company's obligations and rights.

Practice prevention. Have your attorney review contracts and agreements before they're signed.

Get your attorney's opinions on documents you have drafted - such as employee policies - before you put them in place. You want to make sure they meet the requirements of the law.

Familiarize yourself with trademark and patent laws so you don't violate them. Learn how to apply for a trademark or copyright should you need to do so.

Understand the law as it pertains to your organizational structure. Your legal obligations as a C corporation, for example, will differ from those as a sole proprietor.

Policies for Employers to Implement
A policy, which states the company is an equal opportunity employer and strongly enforces a nondiscrimination policy.

A strong sexual harassment policy detailing what isn't accepted at your place of business.

A policy about phone and/or e-mail communications.

Expectations of employees.

Include how your company plans to monitor or take action on all of the stated policies.

Obtaining a Lease
Be prepared to negotiate. The landlord's printed lease will most likely favor the landlord.

Match the lease to your business's needs. If location is important, you'll want a longer lease - or a shorter one with options to renew.

Understand who pays what - such as utilities, repairs, insurance and even taxes. You may want to pay slightly higher rent for eliminating these items.

Be aware that your negotiating power is stronger in a market where lots of commercial space is available.

Remember that a lease is a legal document. Have your attorney review it before you sign.

Advertising Legally
Don't engage in false, misleading or deceptive advertising. Make sure your claims are accurate.

Obtain written permission to use photographs, endorsements, or quoted matter. Remember that some material is protected by copyright.

Don't use words and phrases like "free" and "easy credit" unless they're true. Easy credit, for example, means you offer credit to poor risks without charging them more for it.

Remember that consumers can sue you for deceptive advertising, and federal, state, and local governments can take action against you.

Consumer Credit Basics
Know the laws. If you must grant credit directly to consumers, familiarize yourself with both federal and state consumer credit statutes.

Tell the truth. The Truth in Lending Act requires you to disclose exact credit terms, such as the monthly finance charge and annual interest rate.

Follow correct procedures for handling billing mistakes. If you don't, you may have to give the customer a $50 credit even if your billing was right.

Don't discriminate on the basis of race, color, religion, national origin, age, sex or marital status when granting credit.

Developing an Employee Handbook
Some company policies have to be in writing - such as policies on sexual harassment and discipline - so employees know what's expected of them. These can form the basis of an employee manual.

Draft your employee handbook yourself or assign someone else in the company to do it. Then have it reviewed and fine-tuned by your lawyer.

Include a disclaimer stating clearly that the manual is in no way a legal contract.

Make sure every employee receives a copy of the handbook and signs a statement saying they've read it. Review it every six months or so and update it as needed.

Protecting Yourself from Employee Lawsuits
Obey the laws regarding employees. Don't discriminate in hiring, for example, or permit sexual harassment.

Hire carefully. Look for people with a strong work ethic and avoid hiring those who feel life owes them something.

Adopt strong employment policies. Communicate them clearly to employees and enforce them.

Keep good records on employee mistakes, even when they're not firing offenses. Document your own actions and the reasons behind your employment decisions.

Consider buying employment-practices liability insurance (EPLI).

When Military Duty Calls
Employees have the right to use their vacation time or personal days during their service; they may also opt for unpaid leave.

You aren't obligated to pay employees who are absent on account of military duties, unless your company policy says you will.

If your company does have a paying policy for military service time, you can't require employees to use their vacation or paid leave time.

You must extend the same benefits to employees who are absent for military service as you do to employees who are on nonmilitary leaves of absence.

You may temporarily fill vacancies left by military employees absent for service. However, upon their return, military employees are entitled to the same positions they left.

Brought to you by SCORE, "Counselors to America's Small Business."