Estate Tax Planning & Family Limited Partnerships

The general partner(s) manage the assets contributed to the family limited partnership. Limited partners generally have no rights with respect to the assets held by the FLP. The lack of Marketability and the fractional ownership of the limited partnership interests held by the limited partners are two of the well-established reduction principles that diminish the value of the taxable estate. The discounts allowed by the restricted rights provides for the reduction in the value of the assets held by each limited partner, but also increases the amount of annual tax-free gifting that can be attained. The current high marginal estate tax rates allow for wise and prudent planning which is necessary to preserve the family’s wealth.

Centralized Management of Family Assets
When using a corporation as the general partner, the general partner controls all of the assets in the partnership. This corporation can also employ family members and others. It will call meeting, conduct training sessions and facilitate wealth management. With a corporate general partner, continuity must be ensured even in the event of the husband and wife.

Minimize Probate
By using an FLP, the time and expense of probating an estate can be greatly reduced. When a Living Trust is also used, then there is no probate. Living Wills are not public record and therefore no one but those involved in the family know of its contents.

Cure Title Defects
The procedure for transferring assets to an FLP can help with the discovery of title defects. This can be a significant issue for real estate assets if not discovered and corrected.

Disaster Recovery Plan

A disaster recovery plan is a documented process to recover and protect a business IT infrastructure in the event of a disaster. Basically, it provides a clear idea on various actions to be taken before, during and after a disaster.

Disasters are natural or man-made. Examples include industrial accidents, oil spills, stampedes, fires, nuclear explosions/nuclear radiation and acts of war etc. Other types of man-made disasters include the more cosmic scenarios of catastrophic global warming, nuclear war, and bioterrorism whereas natural disasters are earthquakes, floods, heat waves, hurricanes/cyclones, volcanic eruptions, tsunamis, tornadoes and landslides, cosmic and asteroid threats.

Disaster cannot be eliminated, but proactive preparation can mitigate data loss and disruption to operations. Organizations require a disaster recovery plan that includes formal Plan to consider the impacts of disruptions to all essential businesses processes and their dependencies. Phase wise plan consists of the precautions to minimize the effects of a disaster so the organization can continue to operate or quickly resume mission-critical functions.

The Disaster Recovery Plan is to be prepared by the Disaster Recovery Committee, which includes representatives from all critical departments or areas of the department’s functions. The committee should have at least one representative from management, computing, risk management, records management, security, and building maintenance. The committee’s responsibility is to prepare a timeline to establish a reasonable deadline for completing the written plan. The also responsible to identify critical and noncritical departments. A procedure used to determine the critical needs of a department is to document all the functions performed by each department. Once the primary functions have been recognized, the operations and processes are then ranked in order of priority: essential, important and non-essential.

Typically, disaster recovery planning involves an analysis of business processes and continuity needs. Before generating a detailed plan, an organization often performs a business impact analysis (BIA) and risk analysis (RA), and it establishes the recovery time objective (RTO) and recovery point objective (RPO). The RTO describes the target amount of time a business application can be down, typically measured in hours, minutes or seconds. The RPO describes the previous point in time when an application must be recovered.

The plan should define the roles and responsibilities of disaster recovery team members and outline the criteria to launch the plan into action, however, there is no one right type of disaster recovery plan, nor is there a one-size-fits-all disaster recovery plan. Basically, there are three basic strategies that feature in all disaster recovery plans: (a) preventive measures, (b) detective measures, and (c) corrective measures.

(a) Preventive measures: will try to prevent a disaster from occurring. These measures seek to identify and reduce risks. They are designed to mitigate or prevent an event from happening. These measures may include keeping data backed up and off-site, using surge protectors, installing generators and conducting routine inspections.

(b) Detective measures: These measures include installing fire alarms, using up-to-date antivirus software, holding employee training sessions, and installing server and network monitoring software.

(c) Corrective measures: These measures focus on fixing or restoring the systems after a disaster. Corrective measures may consist keeping critical documents in the Disaster Recovery Plan.

The Plan should include a list of first-level contacts and persons/departments within the company, who can declare a disaster and activate DR operations. It should also include an outline and content stating the exact procedures to be followed by a disaster. At least 2-4 potential DR sites with hardware/software that meets or exceeds the current production environment should be made available. DR best practices indicate that DR sites should be at least 50 miles away from the existing production site so that the Recovery Point Objective (RPO)/Restoration Time Objective (RTO) requirements are satisfied

The recovery plan must provide for initial and ongoing employee training. Skills are needed in the reconstruction and salvage phases of the recovery process. Your initial training can be accomplished through professional seminars, special in-house educational programs, the wise use of consultants and vendors, and individual study tailored to the needs of your department. A minimal amount of training is necessary to assist professional restorers/recovery contractors and others having little knowledge of your information, level of importance, or general operations

An entire documented plan has to be tested entirely and all testing report should be logged for future prospect. This testing should be treated as live run and with ample of time. After testing procedures have been completed, an initial “dry run” of the plan is performed by conducting a structured walk-through test. The test will provide additional information regarding any further steps that may need to be included, changes in procedures that are not effective, and other appropriate adjustments. These may not become evident unless an actual dry-run test is performed. The plan is subsequently updated to correct any problems identified during the test. Initially, testing of the plan is done in sections and after normal business hours to minimize disruptions to the overall operations of the organization. As the plan is further polished, future tests occur during normal business hours.

Once the disaster recovery plan has been written and tested, the plan is then submitted to management for approval. It is top management’s ultimate responsibility that the organization has a documented and tested plan. Management is responsible for establishing the policies, procedures, and responsibilities for comprehensive contingency planning, and reviewing and approving the contingency plan annually, documenting such reviews in writing.

Another important aspect that is often overlooked involves the frequency with which DR Plans are updated. Yearly updates are recommended but some industries or organizations require more frequent updates because business processes evolve or because of quicker data growth. To stay relevant, disaster recovery plans should be an integral part of all business analysis processes and should be revisited at every major corporate acquisition, at every new product launch, and at every new system development milestone.

Your business doesn’t remain the same; businesses grow, change and realign. An effective disaster recovery plan must be regularly reviewed and updated to make sure it reflects the current state of the business and meets the goals of the company. Not only should it be reviewed, but it must be tested to ensure it would be a success if implemented.

Entrepreneurial Mind Frame

Entrepreneurs make up only about 15% of the working population in the US. Far fewer actually succeed than those who attempt to become self employed business people and venture out on their own. So what makes people decide to take the entrepreneurial path, when so few actually make it a reality?

Is the American dream a possibility for anyone, or, does it take more than most to become a successful entrepreneur?
The success of an entrepreneur does depend on their mindset. A large percentage of business owners will quit in their first five years in business. What is needed is the fortitude and belief that goes with attaining success.

Entrepreneurs are risk takers and dreamers. The difference between the dreamer and the entrepreneur though, is that the entrepreneur takes actions based on their dreams. They persist through the hardships and never give up! Many entrepreneurs start with an idea. Their success is determined by their belief that they can create something greater than simple monetary success. Often, it is about creating something which will benefit the world.

James Dyson, for example, came up with the idea of the bagless vacuum cleaner. Despite multiple set backs, over 5000 prototypes and not being able to get any manufacturers or distributors to accept his idea, he persevered. It was over a decade after his initial idea when his concept came to fruition. Even then, it was after a lot of difficulties and hardship due to the vacuum replacement bag industry, which was worth £100 million in the UK.

In Simon Sinek’s book ‘Start With Why’, he suggests that the biggest companies in the world are so because of their “why?” – their reasons for building a business in the first place. In all cases, it wasn’t just to make money, or make technology better, or some whimsical ideology.

The Wright Brothers, for example, became known as the pioneers of the first manned flight. But their competition was much better funded and well connected – Samuel Pierpont Langley had worked at Harvard, had a number of powerful connections, including Andrew Carnegie and Alexander Graham Bell. The War Department funded his project with a $50k grant, a seemingly massive advantage to the unconnected Wright Brothers who had no money or influence. However, their passion and devotion to change the world with this new technology drove them to attain the first flight in history in 1903.

Desire for material things and monetary wealth can only carry someone so far. Unless you have a goal or passion which is bigger than that, you may lose the momentum and fail to maintain your enthusiasm for any length of time.

The entrepreneurial mindset is one which taps into your purpose. Without a purpose driven goal or aim, it can’t take long before disillusionment kicks in. With a mindset which takes into account a larger purpose, entrepreneurs can build huge businesses because they ‘saw’ a vision of what they wanted to create. If the purpose is greater than the obstacles which lie in the path of attaining it, no amount of setbacks will stop you from achieving your goal.

On the other hand, if you set out to do something and something gets in the way and stops you, your initial reason, (your “why?”), may not have been strong enough to endure all the battles along the way.

Entrepreneurial mind frame (or mindset) therefore, must be aligned with both your vision, your values and your purpose. If your values are not in alignment with your purpose and vision, you’ll come up against road blocks which will stop you from achieving your goal.

Coworking Spaces for Business Travelers

Travelling is a very basic component of every business institution. Meeting with the partners and remote coworkers every now and then is crucial to intensify the growth of the business. Generally, the business executives prefer meetings in person. For countless reasons you may have to travel to different cities or countries and host business meetings.

However, the work ethics has changed significantly in the world, making things more digitalized but there are not enough ideas in the world that can put an end to business travelling. While hotel conference rooms are always a pick for the business travellers, the meetings can also be held in the coworking spaces.

Hotel conference rooms charge immensely to arrange meetings. And since these meetings are quite frequent, you always look for an outlet that can save you some money. So today, we will be discussing some of the choices that you have to hold meetings or presentation for your business-

Business Centers- To begin with, we would like to introduce Business Centers as your initial choice of holding business meetings. This alternative does not require any former investment. The presentation rooms and business meeting rooms are rented on hourly basis or for days. You can rent the room as per your needs. Most of these places are equipped with internet, printers, workstations, meeting tables in different sitting capacities, projectors, etc. The Business Centers are designed to give you real-life office experience on a remote location.

Business Hotels- As we were discussing earlier, Business Hotels is the common-most choice of every business traveller to host business meetings. These hotels usually have meeting rooms, classrooms, private office, individual desks etc. The ambience is amazing and you can also quickly arrange lunch for the clients. The Business Hotels are usually equipped with all the major amenities that you may need to hold meetings. The rent however is a troublesome element. You will find business hotels to charge massively for the services delivered. You can rent it for hours or days, as per your needs. Of course, you can also stay at the same hotel and make arrangements for the meeting.

Coworking Spaces- One of the most pragmatic option that is available on an affordable rate are the coworking spaces. Coworking spaces are still creating their market as not many business people know about it. These offices are available at low prices and can be rented for hours or days. They have fine suitable for different kinds of professionals. The amenities that you get at coworking spaces are internet, projectors, meeting rooms, etc. You can also conduct meetings in the dedicated coworking places and meet new people. This will also help you to connect with professionals that may help you with your business as well. It is a perfect choice for the professionals with budget constraint.

Harvest Is Over – Better Get the Ladder

When business is good and customers are eager to buy, it sure is a great time. Business seems bountiful and everlasting. You’re hot. The phone is ringing, orders come through a cornucopia of the internet, customers stand in line… easy pickings… like harvest time in an orchard and all you have to do is just walk over to a tree and pluck another apple… one customer after another… you feel that you are a business genius. Here’s some advice from someone who has been there: better enjoy it while it lasts.

Because, after a while, the orchard is picked over. Sometimes there is a drought. Insects or disease or a frost attacks the crop. Customers now are standing in line somewhere else for the next shiny thing. The market swings in other directions away from you. The easy pickings are long gone. Customers have dwindled. You are no longer a genius, what oh what to do? Wringing your hands doesn’t help.

In the orchard, some starve because they can’t get to the harder-to-reach fruit, even standing on your tippy-toes, sigh, and give up; survivors build ladders to climb higher. In business, some give up and close shop. Those who have the resources and the gumption to survive evolve by changing product, marketing harder and smarter, perhaps even changing their business model. They change their offerings and bring out new, improved colors or sizes or capacities or groupings. They take groups of products or services into and put them into different combinations or bundles with new pricing.

Survivors have a way of going after an increasingly more elusive harvest. They have larger crops in good times when the picking is easy and can sustain themselves when there is a drought or other calamities. Whether the tool of survival is a ladder, a marketing plan, a customer retention plan, customer service training, sowing, fertilizing, weeding, pruning, and harvesting… it all needs to get done year after year.

Increase your reach now, plan your evolution when business is good, before the drought, before customers defect for the latest fashion, before the next shiny thing comes and replaces you in the marketplace, before something else gains favor. Always be aware of events that arise and affect your market and circumstances beyond your control. Keep your eyes and ears tuned to the changes happening around you and your business. Do that and you will survive and prosper in good times and bad.