For most people, succession planning can represent a significant obstacle. You might be organized in your professional life, but when it comes to financial and succession planning, you may find yourself wondering, “Am I doing enough?”
According to our CEO, Eric Rigby, the most challenging part of succession planning is getting started, and as Benjamin Franklin expertly said, “If you fail to plan, you are planning to fail.”
It is never too late to get started on your succession planning, and Rigby Financial Group is here to help.
Succession Planning For Individuals
The truth is there is no perfect time to begin the journey of succession planning. Many people find it easy to delay answering the uncomfortable question of, “What happens to my assets and my loved ones when I die?” Individual succession planning is so highly avoided that roughly half of Americans don’t have a will or an estate plan. It is never too late to evaluate your assets and begin this process. Ultimately, everyone’s succession plan will be different depending on your unique circumstances and how you want what you leave behind to be distributed.
For those individuals who may feel stressed by the idea of preparing for their death, the best tactic is to break down the task into smaller and more manageable pieces while considering your marital status, the estate size, privacy concerns, and philanthropic goals.
Marital Status in Succession Planning
An important aspect to review when building a succession plan is your marital status and what your death means for your partner. Every state has different provisions regarding what your spouse is entitled to, so it is imperative to understand the specific laws and provisions of the law that applies to your state of residence. For example, Louisiana is one of 7 states with community properties, meaning that the state, along with Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin rules that all assets acquired during a marriage are “community property.” The remaining 43 states are common law property states, which provides that property acquired by one member of a married couple is owned entirely and solely by that person.
Common Law Property States
In a common law property state, when one spouse passes away, their separate property is distributed according to the will or according to probate in the absence of a will. If they own property in “joint tenancy with the right of survivorship” or “tenancy by the entirety,” the property goes to the surviving spouse. If the property was owned as “tenancy in common,” then the property can go to someone other than the surviving spouse.
Community Property States
The community property states, also known as marital property, rule that all earnings, property bought with those earnings, and debts accrued during the marriage are shared equally by both spouses absent a separate property regime. Any assets acquired before the marriage are considered separate property and are owned only by that original owner. However, a spouse can transfer the title of any of their separate property to their spouse or the community. When it comes to community property, a spouse may not transfer, alter or eliminate any whole piece of community property without the other spouse’s permission, but they can manage their half. Upon death in a community property state, 50% of your assets will go to your surviving spouse, and the remaining 50% will go to your children under the age of 23. If you do not have children under that age, you are entitled to leave your half of the community property to whomever you wish. If you choose to leave your assets to someone other than your spouse, you will need them to sign off on this request.
In community states Arizona, Nevada, Texas, and Wisconsin, you can add the “right of survivorship” to your community property so that when one spouse dies, the other automatically owns 100%, which avoids probate. While in California and New Mexico, couples can qualify for simplified procedures for transferring property to avoid probate. In Louisiana, however, the community property must go through probate.
If you die without having an executed will in force, your assets will be subject to intestate succession. If you die intestate while single, the court will identify your closest legal relative(s), who will then inherit your assets—minus the court and executor expenses associated with administering an unbequeathed estate. Most likely, if you are unmarried, this will be your children, or your parents, or your siblings, respectively.
Why You Need a Will
Forbes lists a will as the number one document you should have in your estate planning arsenal. Despite the advice that a will is a necessary document, 6 out of 10 people do not have one. Taking the time to create a will gives you and your family a plan when dealing with death and allows you to have control over your belongings and what you want to happen to them when you are gone. The will removes the guesswork of who will inherit what aspects of your estate and allows your family to grieve rather than figure out how to handle what you’ve left behind. Additionally, a will keeps your family out of probate court. If you die without a will, which is referred to as dying intestate, the court will settle your estate for you. Like marital status, each state has its own intestacy laws; most courts will give half your belongings to your spouse and half to your children. But, if you are not married or have children from a previous marriage, things become more complicated. If you are single and childless, the court will divide everything evenly between your parents and siblings. A will also protects your children. If you die intestate and have children under 18, you will have no say as to where the children end up. A will is the only way to leave a plan for the care of your children.
Legal Aspects of Succession Planning
Succession planning requires a lot of documentation, such as a will, a medical power of attorney, and a financial power of attorney. Getting all of these documents in place is crucial, and we recommend seeking the advice of retaining professionals such as an attorney and a CPA to ensure that you are well-informed and that the process is handled efficiently and correctly.
Durable Power of Attorney
Regardless of your economic situation, succession should be at the forefront when you plan your future.
Suppose you cannot make decisions for yourself. In that case, you will need a durable power of attorney (POA), which legally authorizes someone else to handle certain matters, such as finances or healthcare, on your behalf. If the power of attorney is durable, it remains in effect if you become incapacitated due to illness or an accident. Durable powers of attorney also help plan for medical emergencies and declines of mental functions to ensure that your finances are taken care of. Some of the things that the durable power of attorney can do on your behalf are as follows:
The POA documents, similar to a will, eliminate confusion and uncertainty when family members are faced with difficult decisions. Unlike ordinary powers of attorney, a durable POA will not expire if you are no longer capable of making decisions. You can revoke your power of attorney at any time, as long as you’re mentally competent.
Medical Power of Attorney
Oftentimes, individuals prefer to have separate powers of attorney for their financial and medical affairs. The person appointed as your medical or health POA will be granted the authority to handle all the medical decisions on your behalf. This individual will operate in accordance with your wishes to execute your care and end-of-life arrangements. This appointment can be used in conjunction with a living will or may contain living will directives. If you are in a vegetative state or unable to communicate your wishes, you will need a medical power of attorney to allow your loved ones to decide on your care. Upon appointing a medical POA, it is advisable to consider nominating an alternate agent in case your first choice is unable or unwilling to make a healthcare decision.
When appointing a medical POA, you must be a mentally competent adult. If you should ever choose to cancel your designated individual’s status as POA, you must be of sound mind and notify your doctor and the appointed individual.
Benefits of Bringing in a CPA During Individual Succession Planning
Beyond your marital status, POAs, and your will, there are numerous areas to consider when implementing a succession plan. While most people know they should hire a good attorney to help ensure the legal requirements are met professionally and thoroughly, not many people understand the value of a CPA in the process. When it comes to nuances of succession planning, a CPA is beneficial in the following ways:
- Helps reduce taxes: a CPA can advise you on reducing the chances of owing estate taxes, and the impact of what various choices mean for your heirs.
- Aids in trust planning: while an attorney can help you set up a trust, a CPA will help ensure you follow tax rules, understand the tax filing forms, and are using the correct type of trust.
- Advises early actions: not all estate and succession planning happens in a will or trust, so a CPA can help you make decisions ahead of time, such as using the gift tax exclusion or diversifying ownership in your business.
- Helps your executor: a CPA can develop a relationship with the executor of your estate to aid in various aspects, including filing final tax returns, estate Forms 1041, or Schedules K-1.
- The Rigby Financial Group can put together a statement of net worth, liabilities, passwords, and other financial information to keep you organized.
Succession Planning with Rigby Financial Group
When you want to begin the succession planning process, choose Rigby Financial Group. At Rigby Financial Group, we ensure that you have a plan that best fits your individual needs and the long-term goals you have for your family. Although succession planning is often an uncomfortable subject, leaving your loved ones without a plan in place will place an unyielding burden on them that is dealt with while they process their grief.
Rigby Financial Group welcomes the opportunity to take that first step with you to get your succession planning process rolling. Our knowledgeable CPAs and financial advisors are ready to offer the support you need regarding succession planning and establishing financial security and growth.
Contact us today to find out how the Rigby Financial Group team can help you!
Many businesses suffered significant losses due to the COVID-19 pandemic; some have been unable to generate revenue at all. As of December 27, 2020, the U.S. Small Business Administration (SBA) established a grant program designed to help small businesses either stay in business or return to operations. This program has allocated $15 billion in grants to shuttered venues, and the SBA’s Office of Disaster Assistance will administer the program.
Who Is Eligible and Who Is Not
The types of venues and promoters that are eligible to apply, as outlined by the SBA, are:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Museum operators, zoos, and aquariums (that meet specific criteria which have yet to be announced)
- Motion picture theater operators
- Talent representatives
- Businesses entities owned by an entity that also meets the eligibility requirements
Other requirements include:
- The venue must have been in operation as of February 29, 2020.
- The venue or promoter must not have applied for or received a PPP loan on or after December 27, 2020.
If your entity meets any of the following criteria, you are ineligible for the SBA grant:
- Your entity received a PPP loan on or after December 27, 2020.
- Your entity is a publicly-traded company or corporation or is majority-owned by one.
- Your entity presents live performances or sells products of a sexual nature.
- Your entity owns and operates museums, theaters, venues, or talent agencies in more than 10 states and more than one country.
- Your entity exceeds 500 employees as of February 29, 2020.
Grant Calculation for Shuttered Venue Operators
For eligible entities, the amount awarded will be one of the following:
- For eligible businesses in operation on January 1, 2019, the grant will be in an amount equal to 45% of their 2019 gross earned revenue OR $10 million, whichever is less.
- For eligible businesses whose operations began after January 1, 2019, the grant amount will be the average monthly gross earned revenue for each entire month of operation during 2019 multiplied by 6 or $10 million, whichever is less.
How to Apply and Prepare for Funding
The applications for the SBA grant are not currently open, but the SBA is working to make them available as soon as possible. You can sign up for email alerts about updates for the grant application here.
To prepare for your grant, you should apply for a Dun & Bradstreet (DUNS) number so that you can register in the System for Award Management. You will not be able to use your Employer Identification Number or your Taxpayer Identification Number for this process. After you receive your DUNS number, you should register at the System for Award Management as processing can take up to 2 weeks.
You can also prepare by gathering documentation showing how many employees you have and your monthly revenue to calculate the number of employees who qualify. The SBA has a FAQ page with information on determining employee count and how to calculate tax revenue loss.
There is an established level of priority for which businesses will receive grant money. It is important to note that $2 billion of the grant money will go to eligible businesses with 50 or fewer full-time employees.
1st priority: Businesses considered top priority have suffered a 90 percent or greater loss of revenue between April and December of 2020 due to the pandemic; these will receive grant money within the first 14 days the awards are issued.
2nd priority: Businesses or organizations that qualify as 2nd priority have suffered a 70 percent or more revenue loss between April and December of 2020, and will receive their grants within the following 14-day period.
3rd priority: Businesses in this group will have suffered a revenue loss of 25 percent or more between one quarter in 2019 and the corresponding quarter in 2020. These businesses will be awarded grants beginning 28 days after the first and second priority groups.
Additional funding will be available for businesses that have suffered 70 percent or more significant losses after April 1, 2021.
How Grant Funds Can Be Used
If you qualify and subsequently receive grant funds, as outlined by the SBA, you may use the funds to cover the following:
- Payroll costs
- Rent payments
- Utility payments
- Scheduled mortgage payments (not including prepayment of principal)
- Scheduled debt payments (not including prepayment of principal) on any indebtedness incurred in the ordinary course of business before February 15, 2020)
- Worker protection expenditures
- Payments to independent contractors (not to exceed $100K in annual compensation per contractor)
- Other ordinary and necessary business expenses, including maintenance costs
- Administrative costs (including fees and licensing)
- State and local taxes and fees
- Operating leases in effect as of February 15, 2020
- Insurance payments
- Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production (this can not be the primary use of funds)
Businesses may not use the grants in the following ways:
- Purchase real estate
- Make payments on loans originated after February 15, 2020
- Make investments or loans
- Make contributions or other payments to, or on behalf of, political parties, political committees, or candidates for election
- Any other use that the Administrator prohibits
If your entity receives money, you will be required to keep and maintain records demonstrating your compliance with the allocation of the funds. Businesses must also retain employment records for 4 years and all other records for 3 years.
Your business must return any funds that were either not used or are leftover within one year of the initial date of disbursement unless the eligible entity also receives a supplemental grant. In this case, leftover funds must be returned 18 months after the initial disbursement date.
There will be additional guidelines once SBA opens the application process.
Let Rigby Financial Group Help You Get Started
Rigby Financial Group dedicates itself to helping businesses develop improved relationships with money. When you work with us, there is no one-size-fits-all plan. We tailor our financial solutions to each individual company’s needs. Whether you need Rigby Financial Group to help with financial planning or act as an interim CFO, we are here for you. With services ranging from tax and accounting to financial planning to acting as your virtual CFO, we’ve got the expertise to help.
Contact us today to get on the road to a thriving relationship with money for your business.
- New Updates: PPP Loan Forgiveness, Part 114 April 2021
- Are You Doing Enough — Or Any — Succession Planning?12 April 2021
- Remote Life7 April 2021
- New SBA Guidance Changes PPP Rules for Schedule C Filers31 March 2021
- SBA to Administer New Grant Program for Shuttered Venue Operators29 March 2021
- Learn Better – the Feynman Way24 March 2021
- IRS Extends 2020 Filing, Tax Payment Deadline to May 17, 202118 March 2021
- 2021 – Why You Should Plan for Your Estate This Year17 March 2021
- Anger: Don’t Run Your Motor on Bad Fuel10 March 2021
- Progress on COVID-19 Relief3 March 2021
- Expectation Versus the Open Mind24 February 2021
- Unpacking the Proposed House COVID Pandemic Relief Bill17 February 2021
- What’s Your Story?10 February 2021
- PPP Round II Loans – What’s New?27 January 2021
- Busy Does Not Mean Productive20 January 2021
- It Took Me a While to Realize . . .13 January 2021
- The ERC – 2020 v 20216 January 2021
- COVID-19 Relief – Year-End Legislative Roundup31 December 2020
- Happy Holidays24 December 2020
- COVID-19 Relief? Not Yet!23 December 2020
- COVID-19 Relief? Negotiations Continue18 December 2020
- Congressional Compromise? $908 Billion for COVID Relief in Two Bills16 December 2020
- What a Biden Presidency Might Mean for Estate Taxes, Wealth Transfers, and Inherited Assets9 December 2020
- What a Biden Presidency Might Mean for Business Taxes2 December 2020
- New IRS Guidance – Expenses Paid with PPP Loan Proceeds Are Not Deductible25 November 2020
- What a Biden Presidency Might Mean for Individual Taxes18 November 2020
- 2021 – Tax Policy and the All-Important Senate11 November 2020
- SBA Issues New Requirements for PPP Loan Justification5 November 2020
- Can Our Smartphones Make Us Less Smart?28 October 2020
- How to Save Money in a Difficult 2020 With Tax Planning21 October 2020
- PPP Loans – New Guidance for Loans Under $50K, Clarification on Deadlines14 October 2020
- The Overscheduled Life – and How to Avoid it7 October 2020
- PPP Loans – Updated Guidance30 September 2020
- Unplug and Breathe23 September 2020
- Travel and Human Connection16 September 2020
- Humble and Kind9 September 2020
- How Do You Make a Beautiful Day?2 September 2020
- Independence or Interdependence? It’s a False Choice!26 August 2020
- What is fellowship19 August 2020
- Guidance on Executive Order Regarding Social Security Taxes12 August 2020
- Serendipity5 August 2020
- Education in the Time of Coronavirus30 July 2020
- Wait! Why it Doesn’t Make Sense to Apply for PPP Loan Forgiveness Yet22 July 2020
- Reap the Benefits of Deliberate Practice15 July 2020
- SBA Begins Accepting New PPP Loan Applications; Good Faith Certifications8 July 2020
- House Joins Senate, Passes Extension to Apply for PPP Loans2 July 2020
- PPP Loans – Early Forgiveness Available, SBA Issues New Forgiveness Applications24 June 2020
- PPP Loan Forgiveness – SBA Issues New Interim Final Rule17 June 2020
- New Guidance – Partial PPP Loan Forgiveness Intact10 June 2020
- Senate Passes Bill to Relax PPP Loan Forgiveness5 June 2020
- House Passes Bill to Relax PPP Loan Forgiveness3 June 2020
- Senate Unanimously Passes Extension to Apply for PPP Loans1 June 2020
- PPP Loan Forgiveness – SBA Issues 2 New Interim Final Rules28 May 2020
- SBA Issues PPP Loan Forgiveness Application20 May 2020
- PPP Maximum Allowable Forgiveness Amount13 May 2020
- IRS Now Says No Tax Deduction For PPP Covered Expenses6 May 2020
- UPDATE – House Passes Additional Funding for Small Business Relief29 April 2020
- The Virtual CFO Minute Episode V29 April 2020
- Senate Passes Additional Funding for Small Business Relief22 April 2020
- The SBA Changes its Mind Again – New Guidance on PPP Loan Applications For Partnerships15 April 2020
- The Paycheck Protection Program Could Help Your Business Now7 April 2020
- Senate Reaches Agreement on Third Coronavirus Stimulus Bill25 March 2020
- Fact versus Fiction – Tax Filing and Payment Deadlines19 March 2020
- Be Safe, Be Alive!18 March 2020
- Talent – or Skill?11 March 2020
- The Virtual CFO Minute – Episode IV4 March 2020
- To Be Or Not To Be Overwhelmed – It’s Your Choice26 February 2020
- Know What to Expect19 February 2020
- The Virtual CFO Minute – Episode III12 February 2020
- The Virtual CFO Minute – Episode II5 February 2020
- The SECURE Act of 201929 January 2020
- The Virtual CFO Minute22 January 2020
- Overcoming Obstacles15 January 2020
- January 2020 Challenge7 January 2020
- Happy Holidays!18 December 2019
- Success11 December 2019
- How to Spark Joy in Your Life3 December 2019
- An Umbrella is Not a Satsuma27 November 2019
- Margins – When is it Better to Color Inside the Lines?20 November 2019
- In Crisis? Text 741741 to be Seen and Heard13 November 2019
- Employing Family Members6 November 2019
- The Future is Female31 October 2019
- Dashboards – How Can They Help You Run Your Business?23 October 2019
- The Third Biggest Reason to Hire a Virtual CFO16 October 2019
- The Second Biggest Issue We See With Not Having a Virtual CFO – And How To Overcome It!9 October 2019
- The Biggest Issue With Not Having a Virtual CFO2 October 2019
- The Power of Having a Virtual CFO24 September 2019
- 9 TO 517 September 2019
- Keeping Up With the Joneses11 September 2019
- Use Your Best Judgement28 August 2019
- Post For 201913 August 2019
- The Amazing Internet7 August 2019
- Are You Really Listening?31 July 2019
- Wimbledon 2019 – Never, Never, Never Give Up!24 July 2019
- The Mountain and I17 July 2019
- Tax Planning for 2019 – It’s Time!10 July 2019
- Be More Effective – Put Some Slack in Your Schedule19 June 2019
- Invictus12 June 2019
- Chainsaw or Scalpel?5 June 2019
- This Will NOT “Only Take A Minute”29 May 2019
- The Meditative Mind in the Digital Age22 May 2019
- Got Worries?15 May 2019
- I Think I Have the Post Jazz Fest Blues8 May 2019
- Qualified Opportunity Zones – New Proposed Regulations1 May 2019
- Make Things Better – A Controversial Statement?29 April 2019
- 5 Steps To Make Your Presentation More Persuasive10 April 2019
- To Outsource, or Not to Outsource? It Turns Out That is a Question3 April 2019
- Proper Prior Planning Prevents Poor Performance27 March 2019
- The Avocado Principles17 March 2019
- Practice Makes . . .13 March 2019
- Four Rules for Deep Work · Rigby Financial Group27 February 2019
- Do-Overs20 February 2019
- Can We Make Ourselves More Intelligent?20 February 2019
- The Power of Authenticity13 February 2019
- This is Marketing6 February 2019
- Opportunity Zones – Deferral of Gains Offers Flexibility for Investors30 January 2019
- Saints Rammed by the Zebras23 January 2019
- Slow Down and Appreciate Life16 January 2019
- After the Holidays . . .9 January 2019
- Happy Holidays!19 December 2018
- 2018 Year-End Top Tax Planning Tips12 December 2018
- Christmas Reflections – What Are You Grateful for This Year?5 December 2018
- Put a Shine on Your Shoes and in Your Heart28 November 2018
- What Will You Be Drinking This Thanksgiving?21 November 2018
- Be Great, Be Remarkable!14 November 2018
- Free Days and Why They Matter7 November 2018
- Should You Play Trick or Treat with This Stock Market?31 October 2018
- How to Save on Your Taxes Through Investment in Qualified Opportunity Zones24 October 2018
- A Thing of Beauty is a Joy Forever10 October 2018
- The Hidden Brain26 September 2018
- Thoughts on Hurricane Florence19 September 2018
- Thoughts on a Legend’s Retirement13 September 2018
- Autumn Transitions and Opportunities29 August 2018
- Qualified Opportunity Zones Offer Potential Tax Savings22 August 2018
- Qualified Business Deduction of 20%15 August 2018
- Post For 201813 August 2018
- Don’t Limit Your Own Happiness – 5 Traps to Avoid8 August 2018
- How to Implement Your Goals1 August 2018
- 7 Characteristics Shared by the Most Productive People25 July 2018
- Make Your Vacation Last Longer11 July 2018
- Focus and Create: 10 Thoughts for Entrepreneurs27 June 2018
- 5 Tactics to Help You Get Through Hard Days20 June 2018
- How to Avoid the Top 5 Mistakes Entrepreneurs Make13 June 2018
- 7 Steps to Take While in Transition6 June 2018
- Stop Being Your Harshest Critic!23 May 2018
- Being Worthy of Trust16 May 2018
- Can Slowing Down Make You Happier? More Productive?9 May 2018
- There’s Only One Happiness in This Life – to Love and be Loved2 May 2018
- Free Days – Rest and Rejuvenation Matter!25 April 2018
- Self-Talk – How the Tough Get Going18 April 2018
- Avoiding Financial Envy11 April 2018
- Practicing Creative Gratitude4 April 2018
- Everybody’s Got Somebody to Thank28 March 2018
- How to be Better Informed While Reading Less21 March 2018
- Does Vulnerability Lead to Confidence?14 March 2018
- Finding Better Solutions7 March 2018
- Hope Springs Eternal28 February 2018
- 4:00 A.M. – The Most Productive Time of Day21 February 2018
- Be Present and Avoid FOMO14 February 2018
- Explore New Places and Expand Your Mind7 February 2018
- How to Take More Time Off and Be More Productive31 January 2018
- One Key to Success – Doing Less!24 January 2018
- Tax Reform 2017 – What Does It Mean For Your Business?17 January 2018
- Tax Reform 2017 – What Will it Mean For You and Your Family?3 January 2018
- Success With Humility – The Manning Way27 December 2017
- The Search For Happiness19 December 2017
- Proper Prior Planning Prevents Poor Performance13 December 2017
- Risk Management and Snow Skiing29 November 2017
- Who Says You Can’t Buy Happiness?22 November 2017
- Investing – a Marathon, not a Sprint15 November 2017
- Why Does Money Matter to You?9 November 2017
- Breaking News – White House and Congressional GOP Leaders Announce Tax Reform Blueprint28 September 2017
- Senate Agreement Opens a Road to Tax Reform27 September 2017
- Succession Planning: What Business Owners Need to Know6 September 2017
- The Outlook for 2017 Tax Reform8 August 2017
- U.S. Economic Performance: January 1 through June 30, 201720 July 2017
- Tax Reform: 1031 Exchanges22 June 2017
- Tax Reform Status25 May 2017
- What We Think Tax Reform Should Look Like27 April 2017
- Deep Work – How to Get More Done in Less Time15 February 2017