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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Andrew Tellijohn
August 2006

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Estate plans

business builder estate plans  

Adapt recipe for
estate plan to
individual owner

by Marlo Turcotte and Marya Robben  

AT SOME POINT you will leave your business. Despite this certainty, many business owners never stop to consider what will happen after they are gone, much less how to put together a recipe for a successful estate plan.

You know your business better than anyone. Although business partners, family members, and the government will throw something together in an emergency, only you can carefully create the perfect recipe for your business.

A comprehensive estate plan works to protect you and your assets during your life as well as at your death. At a minimum, lifetime planning should include a business succession plan, a power of attorney and a health care directive.

A business succession plan is just that, a plan to pass on the business — either during your lifetime or at your death. One common ingredient is a buy-sell agreement that outlines the terms for your partner to buy the business. You should revisit the buy-sell agreement periodically to ensure it has not become stale. For example, have any of the partners changed, or has the business value increased significantly? It is also crucial to ensure the purchasing partner will have the funds available to fulfill the terms of the agreement. This is often accomplished with life insurance.

A power of attorney is a document you sign naming an agent — your attorney-in-fact — and granting that person powers to handle your legal, financial and business affairs during your life. As a business owner, this is important to ensure that business decisions can be made and continuity is maintained if you are unavailable.

Finally, a health care directive (known in other states as a living will) is a document addressing only health-care issues during your life. The health care directive has two parts, and you may complete either or both parts.

The first part enables you to name a health-care agent, who is a person you empower to make medical decisions for you if you are unable to make or communicate decisions for yourself. The second part enables you to express your wishes regarding your health care, such as whether you want to be resuscitated and whether you want a feeding tube.

Having a power of attorney and health care directive may alleviate the need for a court-appointed fiduciary, known as a guardian and conservator, to make decisions for you if you are no longer able to do so. If you do not have these documents in place, then if an alternate decision maker is required, a court will make the decision for you.

Transferring assets
Planning for after your death for the transfer of your assets, including your business, is similar to a meal’s main course. It is the part people think of first. It is an apt comparison because whole menus of options exist in determining what estate-planning vehicles are best for your situation, to whom your assets should go, and how your assets should be transferred.

A will is a cornerstone of your estate plan. A will enables you to select a personal representative (also known as an executor), name guardians for your children, and state who should receive your probate assets. Probate assets are assets you own in your name alone on your death that do not transfer by beneficiary designation.

This is similar to some information in a recipe. While the explanation was concise, you still may not know what it means. With a recipe, you might call Mom for help. In the case of estate planning, ask your attorney to help decipher which assets are probate assets and which recipe will work best for you.

A will directs the transfer of probate assets. A simple example is to say all of my assets should transfer to my spouse or, if my spouse does not survive, to my children in equal shares. The next question is how should the assets transfer — outright or in trust.

Outright means your beneficiary receives the assets directly with no conditions. If the assets transfer to the beneficiary in a trust, you create the trust under your will. You state in the trust provisions when and under what conditions the beneficiary has access to the assets.

A trust is a separate legal entity that must be administered appropriately by the trustee. Some advantages to putting assets in a trust include estate-tax planning opportunities, creditor protection and spendthrift protection. A disadvantage to a trust is that it involves another level of administration. You should discuss with your attorney whether a trust is appropriate for you.

Many other gourmet recipes specifically designed for the business owner exist. A special election allows qualifying estates holding 35 percent or more of its assets in a closely held business to pay its estate tax liability relating to the business over 15 years rather than 9 months. Another election allows the estate to redeem stock at the date-of-death value to pay the tax liability over the 15 years and avoid paying capital gains taxes.

Family limited partnerships may be an attractive option for some business owners who want to retain some control. Employee stock ownership plans enable business owners to transfer ownership to employees over time. The menu goes on.

Everyone’s estate planning recipe is bound to be unique to that individual. It is important to have a plan and to revisit that plan as your business changes. When the day comes to leave your business, be sure to do it on your own terms, even if you are not there to see it through.

[contact] Marlo Turcotte and Marya Robben are attorneys at Rider Bennett law firm in Minneapolis, in the trusts and estates department. Turcotte: 612.335.3871; turcotte@riderlaw.com; Robben: 612.340.8988; mrobben@riderlaw.com; www.riderlaw.com