Legal Foundations for Entrepreneurs with EB Yarnell

Unlock the secrets to bulletproofing your business and personal assets with EB Yarnell! In this episode, EB breaks down the ins and outs of estate planning, from wills and trusts to debunking the myth that trusts are only for the super-rich. Discover how to create a trust that fits your unique needs, offering you sweet tax perks and rock-solid liability protection, ensuring your assets are locked up safe for the future.

Think building a solid legal foundation is boring? Think again! It's all about being proactive to dodge those nasty, expensive legal battles. EB Yarnell dishes out must-know tips on setting up ironclad legal protections from the start, so you’re prepared, not panicked. Whether you're just starting out or looking to fortify your existing empire, this episode is jam-packed with actionable advice to help you tackle the often-missed legal side of entrepreneurship. Don’t miss out – tune in and make sure your hard-earned assets and business dreams are protected!

Visit us at jenniferannjohnson.com and learn how Jennifer can help you build the life you dream of with her online academy, blog, one-on-one coaching, and a variety of other resources!

Transcript

Jennifer Johnson: 0:37

Today we welcome back into the studio EB Yarnell. Eb is an attorney, entrepreneur and community service leader. Her dynamic career has seamlessly woven together law, entrepreneurship and community service. She remains a dedicated professional, making a positive impact on both the legal community and the local community. It is such a pleasure to have you back.

EB Yarnell: 0:57

Thank you for having me again. It's so nice to be here, yes.

Jennifer Johnson: 1:00

So last time we talked about five things that every business needs to have legally from the beginning. Yes, that was really messy, but five things that need to be on our radar Absolutely With regard to legal. Today, I want to talk about essential personal legal planning that every entrepreneur should be aware of and should have on the radar, because we can button up our business. But what about our personal? Because there's never a perfect dissection between your business and your personal ever when you're an entrepreneur.

EB Yarnell: 1:37

Every entrepreneur learns that very early on, when they're working during their family time.

Jennifer Johnson: 1:42

Yes, oh goodness gracious, totally yeah, there's no line. And when we're talking legal, I mean that's very apparent, right? Yeah, because something that happens in your business is going to spill over to personal.

EB Yarnell: 1:58

So when you own a business, when you start a business, you are putting yourself out there into the community personally. So there are techniques, there are ways, there are protective measures that entrepreneurs can utilize to limit that exposure and that liability. So let's get into the big first one.

Jennifer Johnson: 2:24

Yes, Wills, and trusts.

EB Yarnell: 2:26

Yes, the thing no one likes to talk about estate planning. I know let's talk about our mortality, no, thank you, but that's so important.

Jennifer Johnson: 2:38

It is so important you need to continue the legacy, or whether that's selling, whatever that means.

EB Yarnell: 2:44

Absolutely, and you're investing so much. You're investing yourself, your soul. I mean, we know that as entrepreneurs, you're investing everything blood, sweat, tears, all your time, energy, passion. And oftentimes, when we get really rolling in business and things go really really well, the little things like estate planning fall to the back burner 100%. And if we just take care of it and we get it all wrapped up with a pretty little bow on it.

EB Yarnell: 3:13

It's pretty much done. It's much easier to maintain. It takes very little to no time or effort to maintain. We just have to get in and get it done at the onset. So the big thing about estate planning that works well as far as our entrepreneurial efforts and investments and assets is putting our assets into a trust.

Jennifer Johnson: 3:42

Okay, explain what that means, because not everybody understands Well, is a will the same thing as a trust? What's a trust?

EB Yarnell: 3:49

So a will is not the same thing as a trust.

EB Yarnell: 3:52

A trust is its own. I describe it as an entity. It's almost like a business kind of, but it's your personal business, Okay. So it lives on. It exists on past that individual's death Okay. Whereas me, individually, if I die, I'm done. The trust continues to live on. But what's the difference between a will? A will is a document that designates who does what, where things go. It's a way of describing and listing your wishes and, in some cases, assets, but there are some limitations involved in that as well. So a lot of people think, oh well, I don't have enough to warrant a trust don't have enough to warrant a trust.

EB Yarnell: 4:48

Only rich people have trusts, and that's not the case. There are so many different types of trusts. There are so many different ways to utilize trusts, especially if you're an entrepreneur and you have business assets and you have potential business liabilities. There are different types of trusts that go beyond just estate planning that you can utilize to protect those assets and keep them so far separate from yourself that they could be protected if you're sued personally for something that happens in your business.

Jennifer Johnson: 5:22

Ah, I see. So essentially what you said was it's like its own business.

EB Yarnell: 5:27

Yeah, the trust. That's how I describe it. It isn't technically, but again, it's an entity. It's a thing in existence that goes beyond the life of the individual who started it Got it. So, instead of saying, okay, this person died, now we have to get rid of all their stuff, we have to transfer all their assets. This account now has to be closed, this money has to be put somewhere else. It continues on in the trust. The management switches, so it's like a business in that regard. You can designate who manages it when you're unable, and it continues on. There are also tax benefits to having the trust Again, because you're not having to liquidate everything necessarily upon the death of the individual.

EB Yarnell: 6:12

So there's a lot of benefits. This is stuff that has to be planned on an individual basis. There is no right way across the board for everybody. It depends on what industry you're in, what assets you have, what you're looking to protect on what industry you're in, what assets you have, what you're looking to protect, your marital status, if you have kids. There's just so many factors that play into how this picture is painted for you in your life. But it is just such an important piece of every not just entrepreneurs every person's portfolio in life and just in the grand scheme of things, and it's probably the first thing that goes over the lip. Well, it's a difficult thing to acknowledge, right? Because we're basically saying I know I'm going to die and it's not something pleasant, coming in and saying, okay, I really need to figure out where all my things are going to go and who's going to get all my money. It's difficult, it's not a fun thing to face.

Jennifer Johnson: 7:10

We'd rather go to the dentist and have a root canal.

EB Yarnell: 7:14

Right, yeah, yeah, I mean it's tough and it takes time, it's an investment of time. But again, after you have that done, after it's put into that pretty little box with a bow on it, all you have to do is maintain it, change it occasionally if you need to. It's there, it's done. It's so important to do, absolutely. It sounds like it's very important.

Jennifer Johnson: 7:35

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EB Yarnell: 8:24

Yes, now we're going to talk about asset protection. Okay, so I would like to just discuss some basic principles, some common concerns, some considerations that should be made.

EB Yarnell: 8:38

Anyways so when you're a business owner and you have people coming in, you have a product that's going out, whatever it might be, you have some interaction with people. There's always a potential exposure for liability there If they come after your business. It may or may not be a lot of money, a lot of opportunity for them to recover. It opens you up personally and oftentimes they will try to personally sue the owner of a company. Florida law in most what am I trying to say here? Cases Circumstances. In most circumstances there's some protection that's afforded to a business owner. But there are ways that we can further ensure that we're protected and that our assets, our extra properties or whatever we might have, are also protected. So there's a lot of different venues. One is a trust, like we were discussing earlier. There are different types of trusts that we can use as a vehicle to protect our assets and keep them outside of us as an individual, to distinguish them in a way that keeps them outside of the purview of what EB Yarnell has, or what Jennifer?

EB Yarnell: 10:00

Johnson as an individual has. There's a lot of tricky, fancy footwork that attorneys can do to retitle things. If you have say, for example, this is a common thing that we see Business owners have a rental property, they will own the rental property in their own name. This is opening yourself up for huge liability Anything that you own that isn't your homestead, that isn't your Really your everyday, or not even your everyday car. There's a way to protect that too. But I would just say that anything should be considered as far as how it can be better protected, how it can be retitled, as how it can be better protected, how it can be retitled, how it can be better held so that it's not exposed to potential liability.

Jennifer Johnson: 10:51

Okay, it makes sense yeah.

EB Yarnell: 11:04

I mean ouch To have to think ahead to what if I get sued. It's not a happy thought, no, but unfortunately, as business owners, we're targeted, we're an easy target.

Jennifer Johnson: 11:12

Everybody thinks and it's so funny as a business owner oh my gosh, you're rich, right, you are rolling in the dough. People don't understand that. That's not really how a business owner is, right? Not most of us. We're not the Bill Gates's of the world. It's like car accidents, right? I mean that's how I can relate to it.

Jennifer Johnson: 11:47

It's like somebody just slamming on their brakes to get into a car accident just to collect the money. Right, that can happen when you own a business, anything like that. Somebody slips and falls and then they go get.

EB Yarnell: 12:00

Absolutely. Slip and falls are a huge thing. I mean, there's just so many and, again, depending on the industry, there's so much exposure to potential liability there. Anything that you own, you want to protect and there's ways. Say, for example, I was just talking about a rental home that rental home should be a business. You should have another business for that rental home, right, it should be protected as its own business, again, adding a layer of separation between you personally and that property or anything that happens in that property.

Jennifer Johnson: 12:29

And you know a lot of people because I'm kind of going on to the next point but about like well, shouldn't insurance do that?

EB Yarnell: 12:36

Right, that's a question Absolutely, and every small business needs insurance and, again, depending on the area that you're operating in, that insurance looks differently. If you have a building and you're inviting business guests in, you're going to need general liability. There's nothing that says I can't be added to a lawsuit. I can be added to a lawsuit for just about anything. I could be added to a lawsuit and not have been there.

Jennifer Johnson: 13:07

I then have to go prove I wasn't there.

EB Yarnell: 13:12

So a lot of times what will happen is people will add you individually and then you have to go and defend yourself as a business owner. Oh wow, really, unless it's so blatantly obvious, unless it's so blatantly obvious but you still have to make a motion to the court to say this is incorrect and this is why, and that's time and that's money.

EB Yarnell: 13:36

So, when it comes to insurance, when it comes to things like that, they're going to sue your business. They're going to probably put you. Then you're going to have to bring in the insurance company. You're going to have to put the insurance company on notice that this happened. They don't know who your insurance company is Right, of course I don't know. If I had an issue I would sue the business directly and then they would put the insurance company on notice.

EB Yarnell: 13:56

So again, insurance is essential. There's no replacement for having proper insurance in place, but it's limited to whether or not the policy is going to specifically cover that incident. What does the policy say about that type of coverage? Is that covered? And then, what are the amounts that you're covered up to 100%, right? And what are they claiming their damages were? If they aren't met, they can continue to seek more Wow From your business or from you, right? So it's essential that your business assets, your personal assets, that you seek protection for those Right At the onset and that you set things up. It's so much easier to set it up correctly and to do things correctly than to do it wrong and then say, oh, I should go back and change all that stuff, right? So if you know you're getting into business, if you know you're opening a business and you're becoming an entrepreneur and you're exposing yourself to the public, consult with somebody and get that protection in place and hopefully some of that could be avoided, right?

Jennifer Johnson: 15:07

That's 100% crucial. Definitely, have a good attorney in your back pocket. Yeah, you need to have them because they can definitely guide you from the very beginning and we don't want you to have to call us.

EB Yarnell: 15:20

We want to get at least and I can't speak for every attorney, but personally and at my law firm, we believe in getting our clients set up properly. We don't want them to be sued, we want to know that they are protected, and that's our goal. That is the main thing. Let's get you set up right so that you don't need us later Exactly.

Jennifer Johnson: 15:45

Well, thank you again for such a wealth of information for our listeners. If our listeners want to get a hold of you, how?

EB Yarnell: 15:52

can they do so? So my email address is eb, as in boy Newberry, n-e-w-b-e-r-r-y at napleslawus, fabulous, thank you so much again, thank you.