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Homeowners or auto insurance policies are a good insurance foundation, but they may not be enough for the average family. Many folks, and especially those who’ve accumulated any level of assets, will find it prudent to add an excess liability policy, sometimes referred to as an “umbrella” policy, to their insurance coverage. This article explains what an umbrella policy is, what is and isn’t covered, how much coverage might be necessary, and what to expect in terms of cost.
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One of the biggest concerns for family business owners is succession planning — transferring ownership and control of the company to the next generation. A family limited partnership, or FLP, can help owners gradually transfer ownership while still retaining control. It can also provide protection from creditors. This article explains how to establish an FLP and transfer assets to children or other family members. A sidebar cautions about some of the risks of FLPs that are improperly established or administered.
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Earnout provisions require business buyers to make future payments to their seller. Often used when the parties have trouble negotiating a sale price, earnouts require the company to achieve certain post-transaction financial targets. To be successful, such negotiations involve give and take as well as attention to detail. This article shows how earnouts work, and how their provisions should address certain contingencies that could affect the business’s ability to reach the agreed-upon milestones.
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If Congress allows current rates and exemptions to expire at the end of 2012 as scheduled, some families could lose significant amounts of wealth to gift, estate and generation-skipping transfer taxes. But Congress may extend current exemptions and rates or take other action. Because of this uncertainty with estate tax laws, it’s important to stay on the right track. This article discusses whether it’s advisable to make gifts this year.
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