People who are partners in small businesses have to take a unique approach to estate planning. If you are the co-owner of a small business the value of your share in the enterprise may be considerable. If you simply leave it to your loved ones they may want to sell it for any number of reasons. Should they do so your remaining partners would be forced to deal with the outcome without having any say.

This scenario can be avoided by executing a buy-sell agreement, and this small business succession strategy often involves the purchase of life insurance.

We will look at the cross purchase plan here. All the partners in the business get together and decide on the value of an individual share. They then take out insurance policies on each other with the total of them equaling the agreed-upon value of a share in the business.

When one of the partners passes away the insurance policy proceeds will be paid out. The surviving partners then pool this money and utilize it to purchase the share in the business that was owned by the deceased partner from his or her family members.

This is one way that you can choose to proceed if you are a partner in a small business. To explore all of your options in depth, the wise course of action is to sit down and discuss your unique situation with a licensed and experienced Suffolk County estate planning attorney who has a background assisting clients who own small businesses.

Mark S. Eghrari & Associates, PLLC is a member of the American Academy of Estate Planning Attorneys.

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Most people who set up joint accounts – like a bank account – do so with a loved one or business associate.  Joint accounts can be a convenient way for two or more people to manage assets or funds.

But, joint accounts can also cause problems where estate planning is concerned.  For example, joint accounts are not subject to the provisions or control of a Will or other estate planning document.  Say you set up a joint bank account with your brother.  If you pass away, the account belongs to your brother and therefore falls outside the control of your estate plan.  Your brother is under no legal obligation to distribute any of the funds in the account based on your estate plan stipulations.

Be sure to take into account the effect joint accounts have on your estate plan.  Don’t assume funds or assets will be distributed the way you wish – make sure your estate plan covers all contingencies.

Mark S. Eghrari & Associates, PLLC is a member of the American Academy of Estate Planning Attorneys.

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A great estate plan safeguards your future and the future of your family. Here is another way to safeguard your future.

In spite of all the safeguards people try to use, identity fraud continues to grow. Internet-based identity fraud gets a lot of attention, but one of the most common ways identity thieves “steal” personal information is by using an “old” device: The telephone.

What happens? A caller pretends to be working for a company, a financial institution, or a government agency and simply asks for personal information. After all, if the caller knows your name and address and, say, the name of your bank, they must be legitimate, right?

Wrong. Identity thieves are experts at using tidbits of information to fool people into revealing sensitive information.

Here is the best approach to take: Never give out account numbers, credit card numbers, Social Security numbers, Medicaid numbers, or any personal information over the phone – unless you made the phone call yourself. For example, if you call your bank to check on your balance, providing account information is safe because you made the call and you know you’re speaking to someone at your bank.

If you receive a call and, for example, you are interested in purchasing something, or need to provide personal information as part of a transaction, ask the caller for their phone number and the address of the business. Then call back and verify that the business is in fact legitimate.

Or better yet, do business in person: Then you will know exactly whom you are dealing with.

But no matter what, make it a habit to never give out any personal information over the phone. A legitimate caller will understand the reasons for your caution.

Mark S. Eghrari & Associates, PLLC is a member of the American Academy of Estate Planning Attorneys.

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A Family Limited Partnership (also called an FLP) is an estate planning tool that’s used by owners of family businesses and investment portfolios who want to reduce the amount of federal tax they pay when they pass their wealth on to their children.

Here’s how it works:

A Family Limited Partnership is formed, with the parents as General Partners. The General Partners keep a percentage of the interest in the partnership (it can be as little as 1%), and then transfer interests to their children as Limited Partners over a period of time.

The General Partners are the decision-makers for the business and the partnership. The Limited Partners own a part of the business or the investments, but they don’t have the power to control decision-making, and they can’t sell their shares to anyone outside of the family.

This is where the tax savings comes in. As the IRS sees it, the Limited Partners’ interest in the partnership has some value, but that value is reduced because of the restrictions that are placed on the Limited Partners. The children’s non-controlling interest qualifies those shares for a considerable discount, resulting in lower taxes.

If you’re the owner of a family business or a large investment portfolio, you need to talk to an estate planning attorney about creating a plan to protect your wealth and your heirs. Without a plan, taxes can take a big bite out of assets that you intended to keep in the business – and in the family. An experienced estate planning attorney can assist you in analyzing your situation and developing an estate plan that’s right for you.

Mark S. Eghrari & Associates, PLLC is a member of the American Academy of Estate Planning Attorneys.

Visit my website for full links, other content and more!