We Help Entrepreneurs and Families
Keep the Skies Clear and the Future Bright
Sky Unlimited Legal Advisory offers you the perfect combination of trusted advisor, problem solver, keeper of secrets and deep listener.
Our attorneys are specifically trained to help you keep more money in your business and personal accounts, watch out for pitfalls, handle sticky situations (ideally before they even get sticky) and effectively tend to the parts of your business that are especially challenging.
At the same time, we work as your trusted advisor who helps you make the very best personal, financial, legal, and business decisions for your family throughout your lifetime.
You always said you wanted someone who could do all “that” stuff - the tasks that you’d rather not handle.
That's precisely where we step in - protecting your business and your family!
Notes from Our Chief Counsel's Desk
Purchasing a company that is already in existence is a valid alternative. If you are interested in potentially acquiring a business instead of starting one from the ground up, there are several vital questions to answer.
• Do you want to purchase an independent business or a franchise? One decision you must make is whether you wish to buy a franchise or an independent company. Each option presents its own unique set of circumstances. With franchises, you are part of a systematic network built around an established name. There may be stringent requirements regarding the systems and procedures you must follow as a franchisee. If you opt to purchase an independent business, you may enjoy the benefit of increased flexibility, but may require more research and business development to acquire the same level of recognition an established franchise— properly situated—may have.
But without taking the proper precautions, the wealth you pass on is at serious risk of being accidentally lost or squandered. In some instances, an inheritance can even wind up doing your kids more harm than good.
Creating a will or a revocable living trust offers some protection, but in most cases, you’ll be guided to distribute assets through your will or trust to your children at specific ages and stages, such as one-third at age 25, half the balance at 30, and the rest at 35.
If you’ve created estate planning documents, check to see if this is how your will or trust leaves assets to your children. If so, you may not have been told about another option that can give your children access, control, and airtight asset protection for whatever assets they inherit from you.
In our planning process, we always offer parents the option of creating a Lifetime Asset Protection Trust for your children’s inheritance. A Lifetime Asset Protection Trust safeguards the inheritance from being lost to common life events, such as divorce, serious illness, lawsuits, or even bankruptcy.
But that’s not all they do.
Indeed, the best part of these trusts is that they offer you—and your kids—the best of both worlds: airtight asset protection AND use and control of the inheritance. What’s more, you can even use the trust to incentivize your children to invest and grow their inheritance.
Keeping the proper records is not optional—it is required by the Internal Revenue Service (IRS).
The IRS does not require a specific type of record-keeping system. Rather, you must simply use one that clearly shows your income and expenses. Although the type of business you own affects the types of records you need to retain for taxes, in general, you should keep records (either hard copies or electronically) summarizing your business transactions. This summary may be included in your business books, such as accounting journals and ledgers, which show your gross income, deductions, and credits. Your business’s checking account may be the main source of the information included in your business books.
Not only should you maintain a summary of your business transactions, but it is also important to keep supporting documents that can be used to verify the accuracy of your summary. According to the IRS, small businesses should keep:
1. Documents showing the amounts and sources of your gross receipts, i.e., the income you receive from your business. These documents include:
And you might be surprised to learn that there are a variety of settlement options available besides the most common method—a lump-sum payout.
Depending on the life insurance company and policy, these options may be selected by the policyholder ahead of time or chosen by the beneficiary upon the insured’s death. Whether you’re the policyholder or beneficiary, it’s important that you understand these options in order to maximize the policy’s financial benefit and reduce potential taxes.
Here are six popular life-insurance settlement options:
1. Lump-sum: The beneficiary receives the full death benefit all at once in a single payment.
2. Interest Income: The insurance company retains the original death benefit and makes interest-only payments to the beneficiary. The original benefit may be paid in full to the beneficiary after a certain time period or to a contingent (alternate) beneficiary upon the primary beneficiary’s death.
3. Fixed Amount: The beneficiary is paid a fixed amount on a regular basis until the total death benefit (plus any interest accrued) has been paid out. If the beneficiary dies before all of the funds have been paid, a contingent beneficiary may receive the remaining amount.
4. Fixed Period: The beneficiary receives regular payments of both principal and interest over a fixed period of time, typically up to 30 years. If the beneficiary dies before the time period is over, the remaining balance may pass to a contingent beneficiary.
5. Life Income: The beneficiary receives guaranteed payments over the remainder of his or her life. The amount of the payments is determined by the insurance company and based on the beneficiary’s age and gender. The payments continue until the beneficiary dies. If he or she dies earlier than expected, the insurance company keeps the unpaid amount.
Some of these schemes have rightly earned a bad reputation, for example, false promises that you will make thousands of dollars per week simply by stuffing envelopes. Other business opportunities are legitimate but federal and state laws have been enacted to protect purchasers from being misled.
What Is a Business Opportunity?
The definition of a business opportunity is spelled out in the Federal Trade Commission’s Business Opportunity Rule (FTC Rule), which applies in all 50 states. In addition, about half of the states have their own business opportunity laws. In those states, if a business opportunity falls within the FTC Rule’s definition, then it must comply with that rule as well as with state law, if state law includes additional, more stringent requirements.
Generally, under the FTC Rule, a business opportunity is a commercial arrangement in which:
Note: The FTC Business Opportunity Rule does not apply to franchises, which are a different type of business arrangement that typically involves an ongoing relationship between the buyer and the seller, higher upfront costs, and more rules for the buyer to follow in operating the franchise. In contrast, business opportunities do not involve an ongoing relationship, cost less, and do not require buyers to follow the seller’s rules in running the business.