March is Your Lucky Month!
Having solid LIFT business systems is essential to any small business owner who wants to survive and thrive the Covid-19 pandemic. In this month’s personal message from the Gordillo Law Firm, Greg Gordillo talks about a lesson every business owner can still learn from and use to improve their own business.
Every week, the Gordillo Law Firm provides business owners and families with tips to keep them, everything they care about, and everyone they love out of court and out of conflict.
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In March of 2020, we began locking down to cope with the novel Coronavirus pandemic. One year later, as I am recording this message, two of our 50 states – Texas and Mississippi — are about to declare themselves 100% open for business and without any mask mandates. Whether you agree or disagree with what Texas and Mississippi are doing, let’s hope those states are doing the right thing and can lead us all back closer to our old normal rather than a new normal.
The Gordillo Law Firm was fortunate about one thing when the pandemic hit. We were prepared for a new business world dominated by remote business transactions and interactions. I have been doing it for nearly a decade before it became a required practice. For businesses that weren’t accustomed to operating that way, the ability to make the shift for many of them determined whether they survived or thrived in this past year.
🗝Ironically, one of the most important parts a small business or professional practice needs to have in place to make sudden and necessary shifts in practice is a solid infrastructure of business systems that don’t require wholesale changes to allow your business to change its focus. I am talking about having the right legal, insurance, financial, and tax systems established, tweaked, and maintained to keep the ship sailing smoothly even when the waters get rough.
When they do, you need to know how well or poorly your business is adapting. With the right legal, insurance, financial, and tax systems, in place, you will have the necessary foundation to identify the key performance indicators that you must be watching to know how your decisions are impacting your bottom line. That’s why I like to focus so much on getting and keeping this foundation right and tight for our clients. Because it’s the surest way I have seen to help small business owners and professionals get what they want out what they are building.
In this month’s main video from the Gordillo Law Firm, Greg Gordillo talk about What You Should Know About Life Insurance For Your Business.
Every week, the Gordillo Law Firm provides tips for business owners and families.
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As a business owner, your family members aren’t the only ones who could be devastated by your death. Should something happen to you, your team, partners, and clients could all face disastrous consequences. To address this risk, you should consider investing in life insurance.
👴👵 Life insurance comes in two forms: permanent and term. With permanent coverage, as long as you pay the premiums, your insurance cannot be canceled, and your policy will payout when you die. With term insurance, you pay premiums over a certain number of years, usually 10, 20, or 30, and if you have not died during that period, the insurance ends, and no benefits are paid out.
Term coverage is much cheaper than permanent, and it’s typically used by people who expect they’ll only need insurance for a certain period of time.
Now let’s talk for a moment about Permanent vs Term Life Insurance and Which One You Need?
To determine which type you require, you’ll need to consider several factors. First, let’s look at what are the three most common situations that will indicate that You need life insurance coverage:
1️⃣ Your business will need a cash infusion if you die to keep it running until it can be sold or to buy out a partner.
2️⃣ You have dependents—senior parents, a non-working spouse, or dependent children—who rely on you for their financial needs and who will still rely on you after your death, and you won’t have enough saved up to provide for their needs; and
3️⃣ You have estate taxes to cover upon your death.
In these situations, you will want to make sure you have either term life insurance that will continue long enough to address your needs, or you’ll want to consider permanent coverage.
Permanent Life Insurance policies come in plenty of different types. But generally, they all share these qualities.
They typically have two components: the amount that pays for the life insurance, and the amount that builds up as an investment, or cash value. The cash value portion is invested tax-free, and you can use it in several ways: You can borrow against it, take it as distributions for retirement, or use it to pay future premiums.
There are two caveats: Due to the high commissions, you often need to pay premiums on a permanent policy for 10 to 15 years before there’s enough cash value to borrow against or pay premiums. And you definitely want to either borrow against the cash value or withdraw it before your death, or it gets lost.
Covering Your Expenses
Unlike permanent insurance policies, term policies do not have cash value and do not build up as investments. But term policies are less costly than permanent policies, and term policies can be the better choice for many business owners depending on your particular circumstances. For example, make sure you have enough term insurance to cover the expenses your dependents will require until they are no longer dependents, or until you are certain you’ll have enough money saved to cover their lifetime needs. To determine the right amount of term life insurance, consult with us, as your Family Business Lawyer™ or a fee-only financial planner.
If you plan on staying in your business beyond the typical retirement age, or you’ll have estate taxes upon your death, consider permanent coverage. In that case, make sure you check the recommendations of your insurance agent with us to ensure you are getting the right coverage.
Get a Full Evaluation
Every business has its own unique risks, so there’s no way to know exactly what insurance coverage your company needs without a full evaluation. Before you sit down with an insurance agent, meet with us, as your Family Business Lawyer™, to identify the right types and amounts of insurance your business requires.
In this month’s featured video from the Gordillo Law Firm, Greg Gordillo talks about Facebook Legacy Contact.
Every week, the Gordillo Law Firm provides business owners and families
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📱 Facebook has an interesting and little-known feature called a “Legacy Contact.” For this month’s Featured video, I want to give you some guidance about how to use that feature and on Managing Your Digital Afterlife
If you are a Facebook user, you know that Facebook can provide an intimate snapshot of your life. Facebook can also serve as a key part of your legacy—and one you’ll likely want to protect following your death. As with any other digital asset you own, you should include your Facebook account as part of your estate plan.
In addition to including your Facebook profile in your plan’s inventory of digital assets, Facebook also offers a special function, known as a “legacy contact,” for managing your profile after death. Using a legacy contact, you can choose someone to look after your account and control its activities once you’ve passed away.
If you are interested in using Facebook’s legacy contact, I am going to break down the basics of how this function works. To learn more about protecting and passing on the rest of your digital assets, meet with us, as your Family Business Lawyer™ to discuss your options.
Managing Your Digital Afterlife
Upon your death, Facebook allows your account to be “memorialized,” so friends and family can gather and share memories of you and your life. Facebook accounts can be memorialized regardless of whether or not a legacy contact has been selected.
Once your account has been memorialized, only confirmed friends can see your profile or find it in a search. Your memorialized profile will no longer appear in friend suggestions, nor will anyone receive birthday updates or other account notifications.
The word “Remembering” will be added next to your profile name on your memorialized account. Depending on your privacy settings, friends and family members can post content and share memories on your timeline. A memorialized account is locked, so its original content cannot be altered or deleted.
Once your account has been memorialized, your legacy contact will be able to manage your Facebook account based on the permissions you’ve granted him or her. As with any other person you select to manage your assets after your death, you’ll want to carefully consider who to name as your legacy contact.
You should be aware of what your Legacy Contact can and can’t do. For example, here are some of the things you can allow the Legacy Contact to do:
What Your Legacy Contact Can Do
● Write a pinned post for your profile to share a final message on your behalf or provide information about your memorial service
● View posts
● Decide who can see and who can post tributes on your memorialized profile
● Delete tribute posts
● Change who can see posts you’re tagged in
● Remove tags of you that someone else has posted
● Respond to new friend requests
● Update your profile picture and cover photo
● Request the removal of your account
● Download a copy of what you’ve shared on Facebook
Here are 3 key things Your Legacy Contact Cannot Do
● Log into your account as you
● Read your direct messages
● Remove any of your friends or make new friend requests
If you’re not interested in having your Facebook account continue after your death, you can choose to have your account permanently deleted upon your passing.
Preserve Your Digital Assets
Since social media and other digital assets play such a big role in our lives, you should work with us, as your Family Business Lawyer™ to ensure that all of your digital property is protected by your plan. We’ll inventory your digital assets and include instructions on how you want them handled, so they can pass seamlessly to your loved ones upon your death. Contact us today to learn more.
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