Advising Business During Economic Troubles

Yesterday, I spoke with one of my clients and we were talking about the economy. We both agreed that this is a tough business climate. If this is not a recession or worse, I hate to see what we would call it. Business revenues are down, expenses are flat or getting higher, and customer's habits and business pricing is down. For example, McDonalds is now offering $1 soft drinks (any size) and in my opinion, McDonald's realized quickly that customer's habits had changed and were changing.

My basic point is small to medium sized businesses are facing litigation possibilities that have never faced them. Yesterday, I was at the Circuit Court of Cook County with a client that has three (3) lawsuits. Two (2) lawsuits in the Circuit Court of Cook County-Municipal Division and one (1) lawsuit in the Circuit Court of Will County. His question is what do I do?

I believe a lot of small business owners are facing a similar issue. The first thing you do is make sure your personal residence and other investment properties are properly titled and secured. In Illinois, land trusts prevents liens from being placed on your residence. Land trust are also a great basic estate planning tool because you designate you is your beneficiary through a contract. This is similar to setting up a bank account. Second, tenancy by entirety is a good strategy for married couples coupled with a private land trust. Tenancy by the entirety is a way of titling your personal residence when you are married. Thus, one spouse's bills cannot force the sale of your personal residence. The downside is upon the first spouse's death, the surviving spouse has a probate issue because they do not automatically inherit their spouse's fifty (50) percent interest. This is very problematic for second marriages because often times step children and step parents do not like one another. This leads to family conflict. Third, irrevocable trust is a way of gifting your ownership of your real estate into a trust's name. Unfortunately, irrevocable means you do not have the ability to alter, amend, or change. This is a permanent gift where you do not have any control. You select a trustee, who is typically somebody that you trust. This trustee is the beneficiary as well often times. The key is the trustee manages the trust agreement, which is written by an attorney that you hire. This irrevocable trust is similar to transferring the property to your adult children (if any). Unlike quit claiming the property to your child, the Irrevocable Trust protects you in case of divorce or creditor issues by your child. You and your wife still maintain a life estate interest or not depending on your situation. Fourth, in the above example, we settle one (1) lawsuit at a time or at least make sure you are prepared and understand the time frame of a lawsuit. Many times we buy you more time, so you can settle. Other times, you want to know your credit exemptions, so you will know your legal rights.

In conclusion, this is a difficult time for business owners. We understand that and our concentration is asset protection. Asset protection is a legal niche where we assist and advise business owners on their business structure and options regarding lawsuits filed against them by vendors. Sean Robertson is the Principal of Robertson Law Group, LLC and he can be reached at (312) 498-6080 or (630) 364-2318. We practice in the Counties of Cook, Dupage, Will, Lake, Kane, Winnebago, and Kendall.