The Business Wealth Preservation Group, LLC, Taxes - Consultants & Representatives, Fox Lake, IL


Proactive Planning – Why It's Critically Important to Your Business!

Why do we hate attorneys? To really answer this and perhaps finally give you a reason not to hate attorneys, lets look at a few of the most common answers. First, if you do need one, it generally means something bad has happened. Second, just the involvement in a lawsuit, even if you prevail, is a very time consuming, frustrating, and most of all expensive process. And finally, you might be completely innocent, but still decide its better to write a check to settle, in order to avoid a lengthy, time consuming and expensive journey through today’s legal system.

Is procrastination to blame? Perhaps, but in my opinion, it really comes down to the nature of the accounting and legal practices. Too many in the profession are reactive instead of proactive. It’s one thing to step up and defend you, it’s quite another to proactively help you to avoid or at least be a lot less attractive to potential litigators. The desired outcome of effective asset protection planning should not be just about surviving a lawsuit, but discouraging litigation in the first place. As a business owner, you bust your butt trying to manage your employees and squeeze out a profit, but too often make the costly or sometimes the fatal mistake of assuming if there was a better way to do things; one of your paid professionals would show you the light. But before you lay blame, I’m here to tell you it’s really not their fault. I’ve worked with hundreds of accountants, CPAs and attorneys and saw in almost every instance, they are doing their jobs, doing what you pay them for. Your accountant timely prepares your financial statements, answers your questions and files your tax returns. Likewise, your attorney is there whenever the need arises. This is really about you - the business owner. This is your call to action. After all, it’s your business, your assets, your personal net wealth at risk. The law affords many protections for consumers; the law seeks to protect them. Too many business owners look at themselves as consumers, but as business owners, these protections will not be there for you. As a business owner, the law presumes you have a certain degree of sophistication, knowledge, experience and or street smarts. The law looks at you differently. As such, you may view the legal systems and the courts as harsh. But the first move is yours. It’s up to you to seek and find help - proactively. The question is what type of help you need.

I’m here to tell you that a void exists in your current group of professionals in the areas of proactive planning. The critical planning areas for business owners are:

   • asset protection planning
   • strategic tax planning
   • business exit planning
   • wealth building strategies

Are you doing everything possible to put more dollars in your pocket, more dollars into your business, and more dollars into your plan for the future that you can? As a business owner are you taking advantage of all the opportunities to build your wealth and protect it from litigation? Why not? It really comes down to a lack of an awareness, a lack of knowledge, and a lack of planning of all the opportunities that are uniquely available to you, as a business owner in the areas of tax, business and legal planning. For instance, are you really taking advantage of all the opportunities that are available to you in the 7 million word IRS tax code and regulations? The IRS tax code can be viewed as terribly complex, and burdensome, or it can be seen as full of opportunities for the informed.

It might be true that unlike you, the big companies get all the breaks – but it’s not luck. The big companies are aware of and capitalize on “the breaks!” They simply have no void in their planning. Big companies employ a very competent collection of accountants and attorneys and are constantly supplementing that knowledge with the best and brightest consulting firms. I know it’s true. I spent 15 years working for both a Fortune 500 company and a Big Four consulting firm consulting for many Fortune 500 companies. Your biggest problem, as a business owner, is you don’t have access to this expertise. Quite frankly, the Big Four consulting firms (PricewaterhouseCoopers, Deloitte, KPMG, and Ernst and Young) don’t work with anybody except the big boys. It’s a simple business decision on their part. As for you, your challenge is to find someone with the education, credentials and more importantly the experience to provide you with planning that make sense for you and for your business.

One of my favorite quotes in this area comes from the Honorable Learned Hand (U.S. Appeals Court Justice): "There are two systems of taxation in our country: One for the informed and one for the uniformed."

Your challenge is to find someone that can help you in the critical areas of strategic tax planning, asset protection planning, and wealth building strategies while you keep your focus on driving your business. So why is proactive planning so critical? First as a business owner, you are in the potentially most tax advantaged class. You must be capitalizing on all the compensation, benefit, retirement and deferral planning available to you and your business each year. To fail to do so will have a dramatic impact on your financial future. Second and most important, is the area of asset protection. We live in a very litigious society. Statistics suggest a lawsuit is filed every 30 seconds in this country. As a business owner you are a prime target. Why? People like to sue those that they perceive have deep pockets. Attorneys know that most business owners are not properly following corporate formalities and courts will likely allow them to pierce the corporate veil and seize not just your business assets, but your personal assets as well.

And please remember this - the facts that determine whether the court will allow the litigants to pierce your corporate veil cannot be changed after whatever the cause of action might be. All the facts are frozen in time at that moment – entity structure, ownership of assets, compliance with corporate formalities etc. And please don’t chuckle and say you have insurance. Every business owner that has lost everything in a lawsuit had insurance too. They just didn’t read or fully understand the fine print from the policy. Insurance is necessary business expense – but true asset protection comes from your entity structure, ownership of assets and compliance with corporate formalities.

This is your call to action. As a business owner – become one of the INFORMED!

Timothy Foster, JD, MST, Founding and Managing Member of The Business Wealth Preservation Group, LLC, a professional services firm dedicated to counseling business owners in the areas of strategic tax planning, asset protection planning, exit strategies and wealth building strategies. Tim has earned a Masters Degree in Taxation and a Juris Doctor from Duquesne University School of Law. Timothy’s career includes positions with a Big Four national consulting practice where he focused on developing and presenting strategies for Fortune 500 clients and more that 10 years experience in a corporate tax group for a global energy company. For the past decade he has dedicated his passion and energy in developing and overseeing the presentation of strategies for hundreds of middle market and closely held businesses and their owners. For more information call us toll free 1-888-WE-TAXPLAN.