​By Associate Attorney Heather McKaig

Holding companies are having a resurgence in popularity recently.  Interest, as represented by Google searches, has steadily grown and experienced a marked increase in the past eighteen months.  A holding company is a parent company, usually a corporation or LLC, that owns or controls other companies.  Some holding companies are created just to own property, such as real estate, intellectual property, or stocks.

Unfortunately, holding companies and their structure can be misused by those attempting to conceal information about the nature of their businesses in multiple tiers of management or by the holding company itself exerting overreaching control and making unreasonable demands of its subsidiaries.

Most business owners who express interest in holding companies cite liability protection and loss protection as their primary purposes for having one. However, like other corporate entities, the liability protections of holding companies can be disregarded by courts in favor of creditors if the companies are not formed, owned and managed correctly.

Holding companies are not the only means to protect assets from creditors. Both corporations and LLCs provide protection of an individual’s assets from business creditors. And having properly organized, separate LLCs or corporations keeps creditors of one business from reaching the assets of another business.

Holding companies are subject to the same formation, reporting, and maintenance requirements and fee schedules as other companies.  Each subsidiary within the holding company must also keep up with its own corporate governance in addition to its day-to-day management.  Adding the holding company framework creates more work for the business owner in filing and compliance, not only upon formation, but also with regular reporting each year.  More tiers of reporting and compliance brings unnecessary expense and added risk of a missed deadline or annual report. Therefore, the holding company framework is sometimes more trouble than it is worth.

If you are interested in having a discussion about what business structure is right for you, please give Jesson & Rains a call!

By Senior Associate Jeneva Vazquez

We’re thrilled to announce that our firm will be presenting and hosting a table at the National Association of Insurance and Financial Advisors (NAIFA) South Carolina's 2024 State Conference, taking place in Greenville, SC, at the end of the month.

During this seminar, we’ll explore key insights for effective collaboration with insurance and financial professional service providers. Our discussion will focus on identifying legal planning opportunities for advisors and dispelling common legal misconceptions. Here’s a sneak peek at some of the topics we’ll cover in our presentation:

Trusts: Not Just for the Wealthy
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One of the biggest myths we encounter is that trusts are only for extremely wealthy individuals. There’s no specific wealth threshold that necessitates a trust. In fact, a revocable living trust is a practical tool for families of all sizes. Trusts allow for quicker access to assets upon death or incapacity, enhance privacy, and can protect assets for children or other beneficiaries. Moreover, trusts can help eliminate the need for court involvement upon your death or if you become incapacitated, saving time, money, and stress.

Trusts are particularly beneficial for clients with:

• Minor Children: Ensuring responsible management of assets until children reach adulthood.
• Blended Families: Navigating complex family dynamics to protect all beneficiaries and reduce family conflict.
• Property Owners: Simplifying asset transfers, especially with property across state lines.
• Business Owners: Planning for business succession and asset protection.

The Limitations of Beneficiary Designations

While beneficiary designations are an important mechanism for transferring assets, they aren’t a one-size-fits-all solution. Special considerations should be made for:

• Minor and Young Beneficiaries: Designating minor beneficiaries can subject the assets to outside oversight or unnecessary probate exposure. Additionally, designating young adults, such as an 18-year-old, could lead to outright access, bypassing protections in a will or trust.
• Beneficiaries with Lifestyle Concerns: Beneficiaries with substance abuse issues, those prone to quick loss of assets, individuals in high-liability professions, or those in divorce-prone marriages have no protection over assets passed outright via beneficiary designation.
• Special Needs Beneficiaries: Careful planning is required to ensure compliance with government benefits.
• Complicated Distribution Plans: Relying solely on beneficiary designations severely limits planning opportunities and contingency plans.

It’s critical that all assets are individually considered as part of the estate planning strategy. When beneficiary designations and your estate plan are set up with competing outcomes, it can completely negate your estate planning efforts. Planning solely through beneficiary designations severely limits opportunities to protect and manage assets for your beneficiaries.

The Importance of Collaborative Strategies

We believe in the power of collaboration with financial and insurance advisors to create cohesive and effective estate planning strategies. By integrating insights from various professionals, we help clients develop robust estate plans tailored to their unique situations.

Our firm stands apart by offering full-service solutions, including individual asset analysis and transfer recommendations through our Family Wealth Inventory process, comprehensive trust funding services, and support in communicating with other trusted insurance and financial advisors. We want our clients to have estate plans that truly serve their loved ones when they need them most. A comprehensive approach to modifying assets for intended transfer is essential to achieving this goal, which happens more efficiently through collaboration with other professional advisors.

If you’d like to learn more about our collaborative and comprehensive approach to estate planning, or how we can work alongside your other trusted advisors, schedule an introductory call to get started!

By Attorney Kelly Jesson

We previously reported back in April that the Federal Trade Commission (“FTC”) banned non-compete agreements effective September 4.  Almost immediately, the rule was challenged in many courts.  Earlier this week, a federal judge in Dallas struck down the ban across the entire nation, holding that it was “unreasonably overbroad” and the FTC lacked the authority to enact the rule.  Therefore, local business owners can continue to utilize non-compete agreements to protect their proprietary information when an employee with insider knowledge leaves to work elsewhere.  However, our courts will not enforce a non-compete agreement that is not narrowly tailored in scope and geographical area to accomplish that goal, so business owners should seek the assistance of an attorney when putting these in place.

If you have any questions, or need assistance with an employment agreement, please give Jesson & Rains a call! 

By Senior Associate Jeneva Vazquez

For parents, ensuring the protection of minor children in the event of unforeseen circumstances is often a key motivation for considering estate planning. After years of putting off the task of naming guardians in a will, we frequently receive urgent calls from parents preparing to leave their kids with a caretaker for a weekend getaway, riddled with fear about “what would happen to the kids” if something happens to them.

While naming long-term guardians in a will is crucial, it is often insufficient to fully safeguard your children if something happens to you. To eliminate any gaps in your child’s care plan, we offer comprehensive services that go beyond naming guardians in a will. Our goal is to reduce the possibility that your children will ever be taken into state custody (even for a short time) and to ensure your children are raised by the people you select according to your wishes.

Our protection plan for minors covers every detail:

Temporary Standby Guardian Appointment: Legally appoint trusted individuals who can quickly respond to your children, ensuring they are never placed in state custody if something happens to you. This is especially critical if your long-term guardians are not within 20 minutes of your child.

Instructions to Caregivers: We provide an emergency response plan for babysitters, your child’s school, or any caretaker, detailing exactly what to do in case of an emergency. This directs your children to be placed with legally appointed Temporary Standby Guardians, reducing the risk that your children will ever wind up in state custody.

Emergency ID Cards:  ID cards for your wallet inform first responders that you have minor children and provide contact information to ensure your children are always in the care of those you have selected.

Exclusion of Guardian: Clearly specify individuals whom you would never want to raise your children under any circumstance.

Power of Attorney and Medical Power of Attorney: Appoint someone you trust to make important decisions or provide medical authorizations for your children if you are unavailable.

Instructions to Guardians: Share crucial life-shaping guidance with you your children’s guardians, including values, family traditions, education plans, discipline, spiritual upbringing, and other important wishes on how you want your children raised.

Recorded Legacy Interview: Preserve your intangible assets in a recorded interview that can be shared with your children and loved ones— your stories, values, and insights.

Throughout your life, you spend significant time planning for your children—selecting schools or sitters, after-school activities, saving for education, birthday parties, holidays, vacations—you plan, plan, plan.

So why does some of the most important planning for your children get pushed to the bottom of your “to-do” list? Shouldn’t planning for what will happen for your children if something unexpected occurs be a top priority?

​Relying on luck isn’t the best strategy for your children's protection.

If you are a parent of minor children, your estate plan must start with ensuring that your children will always be cared for by the people you choose, in the way you want, no matter what happens. It’s essential to explore the logistics of “what would happen” to your kids if something happens to you and make sure there are no gaps in your plan and that decisions are legally documented.

We’ve designed an estate planning process that is highly flexible for busy parents. Call us to learn how we can help you implement a protection plan for your minor children—no more last-minute panicking before a trip or a night out without the kids.