Bakke Norman is committed to providing its clients and communities with timely and topical information. We recognize that in today’s fast-paced world, you do not have a half day to attend a seminar or even a half hour to read a 4-page newsletter.
With that in mind, we have launched another edition of Bakke Norman’s Bits & Bytes, a series of videos that, in under 5 minutes, will give you news you can use.
The Business Edition of Bits & Bytes is focused on common issues encountered by businesses and business owners throughout the business life cycle, from creation of the business to the transition of the business-either by sale or related-party transfer. The Business Edition also includes information to address the day-to-day challenges of running a business, such as employment issues, new law developments and tax planning.
In addition to the Business Edition, the Lender Edition of Bits & Bytes is specifically focused on issues that arise for lenders, such as bankruptcy, foreclosure, regulations and other collection issues.
We hope you enjoy the videos and truly get some news you can use.
Take a moment for “Bits & Bytes,” as Attorney Tom Schumacher explains succession planning for the owners of a closely held business. This first video addresses personal issues for the business owner.
Disclaimer: This video is designed to be educational and informative, but it is not legal advice. Business, tax and estate planning law is constantly evolving and subject to change. Each situation is unique, and each case should be addressed to fit the unique situation.
This is the first in a series of six videos on succession planning for the owners of a closely held business. This video addresses personal issues for the business owner. In future segments, we will look at the business advisory team, documenting the business organization, timing of the business succession plan and, finally, financial matters.
If you are the owner of a closely held business, at some point you must begin to think of a succession plan. Your first step is to determine your personal goals. As the owner of a successful closely held business, a significant amount of your life has been devoted to developing and growing your business.
Much of your personal identity is tied up in the business. A succession plan will involve transferring the business to family members, co-owners, employees or outside parties unrelated to you, the business owner.
The common element in any business succession plan is that you, as the business owner, are no longer going to be intimately involved with the day to day operations of the business. This will be a dramatic, life changing event for you, the business owner.
The beginning point for a business succession plan is for you to consider your life style and goals separate from the business. What will you do during the 10 or more hours a day you formerly spent working in your business? What are other interests and activities you will pursue? Will you look at taking advantage of other business opportunities?
Will you change the region where you live to a more favorable climate, both for weather and income taxes? Where do other members of your family reside and do you want to be in the same area? Do you want to step back from work completely or do you want to continue to engage in some work activity with your former business, as an employee for another business, or engage in a new business venture?
Another factor to consider is how much of the benefits you enjoy flow through your business, such as vehicles, real estate, club memberships, travel, meals and entertainment. Many, if not all, of these benefits may change in character or disappear once you sell the business.
In addition, they may be paid for with after tax dollars rather than deducted as business expenses. Speaking of dollars, what amount of income is going to be sufficient to support the lifestyle you want to enjoy once you are no longer receiving income and other benefits from your business? What will your monthly and annual budget look like?
These are just some of the factors you need to consider as you begin to establish a succession plan for your business. Before you begin to look at the plan for the business, you need to look at what the plan is for you.
Take a moment for January’s “Bits & Bytes,” as Attorney Deanne Koll explains the lender’s obligations when a borrower gets divorced and comes to an agreement with his or her ex-spouse in the divorce. Click here to learn more, or click here to view previous videos in the Lender Edition series.
Take a moment for “Bits & Bytes,” as Attorney Deanne Koll explains the lender’s obligations when a borrower gets divorced and comes to an agreement with his or her ex-spouse in the divorce.
Disclaimer: This video is designed to be educational and informative, but it is not legal advice. Collection law is constantly evolving and subject to change. Each situation is unique, and each case should be addressed to fit the unique situation.
It is not uncommon for a recently divorced borrower to tell their lender, “Hey, I want to get my ex-wife or ex-husband off the loan I have with you.” The typical reason for the borrower’s demand is an agreement the borrower made with his or her former spouse in the divorce action.
In a divorce, one party usually accepts responsibility for a debt. That party then, customarily, agrees to a “hold harmless” clause within the divorce agreement.
The hold harmless clause essentially says that, if the responsible party defaults on the assigned debt and the lender comes to the non-responsible party for payment, the responsible party will “hold the non-responsible party harmless” from any damages (meaning money) paid.
Additionally, after a divorce, if the non-responsible party remains responsible on the loans—at least on paper—and those loans or obligations continue to show on his or her credit report, which can make obtaining future credit difficult.
So, when the borrower comes to you and asks that you take the ex-husband or wife off the loan, what do you do? The lender is under no responsibility to remove the ex-spouse.
While the spouses may have agreed between each other who would be responsible for the debt, the lender’s rights to collect from either spouse are unaffected. In short, the divorce agreement does not bind the lender.
If collection efforts would ever need to commence on the debt, the lender could seek recovery from either or both spouses. The non-obligated spouse’s recourse is against the spouse who agreed to take the debt, not the lender.
In summary, when a borrower gets divorced and comes to an agreement with his or her ex-spouse in the divorce, the lender is not obligated to play along, but may choose to do so if it so pleases.
Bakke Norman attorneys Tim O’Brien, Pete Reinhardt and Deanne Koll have again been recognized in the latest edition of Wisconsin Super Lawyers. Attorneys O’Brien and Reinhardt were named Super Lawyers, an honor given to no more than 5% of Wisconsin attorneys. To earn the honor, nominees must pass a rigorous, multi-phase selection process that considers 15 separate indicators of peer recognition, professional achievement and high ethical standards. Attorney Koll was named a Rising Star, which recognizes the best attorneys under age 40 or within their first 10 years of practice. No more than 2.5% of Wisconsin attorneys are named to the Rising Star list.
Tim O’Brien is a trial lawyer. He concentrates his practice in defending felony criminal matters, representing persons injured by negligent acts, and assisting businesses involved in litigation. He is certified as Civil Trial Specialist by the National Board of Legal Specialty Certification and is a past Chair of the Litigation Section of the State Bar of Wisconsin. This is the sixth time he has been listed in Super Lawyers.
Pete Reinhardt is also a trial lawyer. He primarily represents individuals and companies involved in employment and business litigation, while also advising them on meeting the requirements of State and Federal labor and employment standards. He also speaks to employers and other attorneys on the best practices and latest developments in employment law. This is the fifth consecutive year he has been listed in Super Lawyers.
Deanne Koll’s practices focuses on assisting local lenders and businesses in collection and creditor actions. She regularly appears in federal bankruptcy court in her representation of creditors and financial institutions. She also uses her extensive financial industry knowledge on business litigation cases and other complex trial work. In 2014, Koll was elected by lawyers from St. Croix, Pierce, Dunn and Eau Claire Counties as their representative to the Board of Governors, which directs and manages the State Bar of Wisconsin. This is the fifth time Koll has been recognized as being a Rising Star by Super Lawyers.
The attorneys and staff at Bakke Norman Law Offices congratulate our friend and law partner, Adam Jarchow, on his inauguration to the Wisconsin State Assembly. We are proud of the great work Adam does for clients and are confident he will bring that same effort to the State Assembly.
Adam will continue in his business, banking and farm practices with Bakke Norman while serving in the State Assembly. Because Adam’s practice primarily involves negotiating and documenting business, farm and real estate transactions, Adam is able to effectively serve his clients whether he is here in Western Wisconsin or in Madison (though knowing how much Adam loves Western Wisconsin, we expect he will spend as much time here as possible).
“Bakke Norman has always encouraged its attorneys and staff to be involved in their communities. We are proud of the active role so many of our team members play,” said Managing Partner Tom Schumacher. “Adam is just one example of this community spirit.”
“One of the reasons I love working at Bakke Norman is because of the firm culture of community service. This is a founding principle and core value of our firm. I look forward to continuing to serve our clients as an attorney while representing the 28th District in the State Assembly” said Adam.
We assist individuals and businesses with a wide range of legal needs throughout northwestern Wisconsin, including Barron, Buffalo, Chippewa, Clark, Dunn, Eau Claire, Pepin, Pierce, Polk, Rusk, St. Croix and Trempealeau Counties and the communities of Barron, Rice Lake, Neillsville, Menomonie, Eau Claire, Durand, Ellsworth, Osceola, Ladysmith, New Richmond, Hudson, River Falls and Osseo.