Asset protection is something that is easy for you to ignore. Doing so could put your business in peril. Join as we talk with Lin Eleoff about asset protection and what you should be doing to protect what you’ve got.
Lin is an attorney and she specializes in working with individuals and businesses with both a do it yourself and done for you asset protection program. Some of the things we’ll cover in today’s show are:
- When you should do your own asset protection versus when you should have an attorney help you.
- Why putting “your head in the sand” is always a bad idea.
- Knowing what the rules are when it comes to how you use digital assets.
- What documents you need for your website to be legal and why.
- When you should use a lawyer and when you should do asset protection yourself.
Transcript:
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.
Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick. You’re at The Sustainable Business.
Today, we have Lin Eleoff with us. She’s an attorney. We’re going to be talking about asset protection.
Now, she has a product she’ll talk about at the end of the end of the podcast which is how you can save yourself a whole bunch of money doing the asset protection which I think everybody likes to do but remember asset protection is one of those really important things we have not talked about yet on this podcast, so I’m really excited to have Lin here today. We can have an interesting discussion about the wonderful world of asset protection.
Hey, Lin, how are you today?
Lin: I’m great.
Thanks for having me, Josh.
Josh: I am so pleased to have you today. You know, asset protection is a really important thing, at least my opinion. It is something the too many business owners just don’t pay enough attention to. So, what is your first message when you talk to a business owner about projecting assets?
Lin: I think the first thing I say is “Don’t put your head in the sand.” This is important stuff. It’s not the sexy stuff, maybe. And it’s not, you know, the really exciting stuff. I know you want to get to all the creative stuff that you do for your business but the legal aspects are so important. And if you’re serious about your business, you will protect it.
Josh: I think that’s a great thing. This has actually happened to me, so this is a really good question I want to ask you. You know, you receive a demand letter claiming you owe thousands of dollars for the unauthorized use of images on your website.
Lin: Right.
Josh: This actually happened to me and there was nothing on the picture or where we got it that said this was copyrighted material and it did cost me a bit of money. I didn’t pay him anything but, boy, it was a pain in the neck. So, what would you recommend people do about that?
Lin: The first thing you do is verify who sent the letter. So, I hear about this all the time and it’s becoming a real scam because it works. Anybody can send you a letter and say, “Hey, that was my image you used. I’m not even giving you an example of the image or the URL but you owe me $10,000.” And there are people who pay that because they know they have images on their website.
So the first thing you do is ask for the person’s name, the company, the proof of the copyright, URLs that show that the copyright exists with them. That’s step 1. Then, step 2, if it’s true that you used that image belonging to that person or company, then you could start to negotiate because you are at fault and people get this wrong all the time. Images are just not free for the taking. Just because they’re on Google, it doesn’t mean you get to use them for free.
Josh: So how do you check? In my case, you know, we took the image. I don’t think we got it off Google. I think we got it off Flickr or some site like that – from Flickr Commons, and there was nothing on there that says this was copyrighted material. How would I know if it’s copyrighted?
Lin: Well, I would make an assumption that it is copyrighted. Everything is. And unless there is a notice or something legally that says “you can use this free of any claims. All rights are yours. Go ahead and use it.” Then do not use it. You absolutely cannot assume that just because there’s no copyright on there, it means you can use it.
A copyright is created at the moment someone creates a work of authorship – an original work of authorship automatically copyrighted, even without the notice on there. So you want to be able to read the fine print. And if it doesn’t say, “Yes, you can use these images. Like, for example, on a site – unsplash.com where there are free images that you can use. If it’s not clear, then do not use it.
Josh: So we use sites now where we actually pay for images.
Lin: Yup.
Josh: Or we actually have a license for images anyhow. So, you know, places like Bigstock Photos or Moon Pixel Art – you know, places like that. Is that safe – to use that stuff and are we protected from being sued?
Lin: Do you read the license?
Josh: We read the license and we paid for the use of the content so I’m assuming that it’s okay for me to use it.
Lin: Yes. The license will tell you how you can use it and how you cannot use it. So, just, if you read that, then keep a copy of that license and keep some note of where you purchased that image because you’ll forget, even if it’s a year or two later. Keep a copy of the license and the image and proof that you bought the license and then you’re covered.
Josh: So what would happen if, you know, well, I guess, that’s sort of like being trademark infringement for using someone else’s business or product name.
Lin: That would be copyright infringement. So, copyright protects original works of authorship like your website content and the product information that you have. Trademark protects your brand – so that would be your company name, your tag lines, slogan, logos that sort of thing.
Josh: So, let’s take a step back and just take a look at asset protection from a higher level. If I own a business, what should I be most concerned about protecting when it comes to asset protection?
Lin: Well, the first thing, when you’re starting a business, is you choose a name for your business and you choose a business entity. So, the business name will only be as good as “what if someone else hasn’t trademarked it already?” And that’s what people right out at the gate. They choose a business name, not knowing whether it’s already taken.
And just because you can’t find it in Google, it doesn’t mean, it doesn’t exist. So, if you want to use that, make sure that it is not trademarked. And that is something that you can use a lawyer to do that. Doing trademark searches on your own, I would not advise that. It is one of the things I would suggest you hire a lawyer to do for you because it’s very complicated and there are databases in each State. So just because it’s not being used in California, it doesn’t mean it’s not being used in Maine, for example.
Now, if that isn’t federally registered, then you can use it in California but you won’t be able to use it in Maine. And that’s the thing, this is the internet, so there are no borders. So you’re doing business across the country.
Josh: Let’s say we’re not a startup. I’ve been in business for 25 years and I’ve been, you know, motoring along. I’ve managed not to get myself seriously sued for anything. But what kind of risk would someone who – this is not a startup. This is a someone who’s an established business, been around for a while, hasn’t paid attention to asset protection. But now, they’ve become pretty successful and they’re starting to make $500,000, $600,000, $700,000 or $800,000 a year. What should those folks be paying attention to? And by the way, those are the folks who are mostly listening to this podcast.
Lin: Well, first of all, you want to take a step back. The internet is not that old. And the law has been slow in catching up but it is catching up.
So, maybe what you were able to get away with in the early stages of the internet, things are different now, the law is catching up. So you want to–like I said, make sure that the name you’ve been using is not trademarked by someone else, or that you were actually the first person to use it and no one else is using it somewhere else. So, you may want to federally register your business name.
You also want to make sure that you have the proper legal documents on your website. For example, a privacy policy. That is absolutely necessary. You need a disclaimer. And you need a terms and conditions. Those three documents you must have on your website or you’re leaving yourself exposed.
Josh: So, where would you find a privacy document?
Lin: I do privacy policy documents for my clients. I also have a do-it-yourself version where I walk you through all the steps. But the things you don’t want to do, first of all, what some people do is they just copy from someone else’s website and then they stick it on theirs. First of all, that’s copyright infringement. The person – the lawyer, presumably, who drafted that privacy policy, owns the copyright to it. So right off the bat, that’s illegal.
Secondly, it may not even cover your particular business. There’s a lot of legal language in there. And if you don’t understand it–I mean, I reviewed someone’s privacy policy and they had the wrong State. They were in California and they said, “If any disputes arise we will resolve them in Wisconsin.” So, they clearly had just copied someone else’s and put it in there. So, that’s dangerous. You also don’t want to use a generator. That’s done by a computer and it cannot possibly be personalized to your business.
So, either get a do-it-yourself privacy policy that walks you through all the steps or hire a lawyer to do it for you. Of course, that’s more expensive so I try to offer do-it-yourself versions of anything that anyone can do on their own. Some of this stuff is absolutely doable. Others are more complicated but the more legal steps you take, the less you give and hand over to your lawyer, thereby reducing the legal fees you pay.
Josh: So, there’s a couple of questions I want to ask you around this. First is, “What should you be doing by yourself and what should you be hiring a lawyer for?” And the second question is, “What things should I be doing for asset protection that are not related to online activities?”
Lin: First of all, you need to have a legal business entity because that is going to separate your personal assets from your business assets. If you’re just operating as a sole proprietor, you are the business, the business is you. There’s no protection whatsoever. So, if you were to get sued, they could come after your home and any other asset that you possess – your kid’s college fund. All of it is put at risk.
So, when you have a legal structure in place, that sort of builds a wall between you and the business, so that if someone does sue you, they can only come after your business assets, then you’ve created a wall of protection. The thing is you want to make sure that you don’t give anyone the opportunity to sort of pierce that corporate veil, right? You can’t say, “I’m an LLC or an S corp” but then behave like a sole proprietor. You use your personal funds to pay your business debts and, vice-versa, you dip into your business finances to pay for your car and vice-versa. If that isn’t an airtight wall separating the two, then the IRS is just going to say, “No, no, no. This is a ruse. This isn’t really an LLC. You’re just trying to short the system.”
Josh: So, if I’m a professional service. Like, in my industry – in the financial services business, I do have a corporation. But if somebody sues me, they’re suing me individually, they’re not suing my corporation. So, in that particular case, how would I protect my assets?
Lin: What would they be suing you for?
Josh: It could be malpractice.
Lin: Okay. So, you want to have malpractice insurance, absolutely. And all business owners should have liability insurance that covers any judgment made against you. So, if there is a settlement that you have to pay, the insurance will cover that. And you also want the insurance to cover any legal fees. So, insurance is absolutely necessary.
If you’re a financial advisor – and I’m not sure what the laws are in your particular State, but you want to find out – if you’re a financial advisor, a lawyer, a doctor, you’re going to be held to a higher standard. And so, you want to know what that standard is and make it clear on your website that you’re offering information and not financial advice. Or, if you are offering financial advice, make it clear that you’ve got your financial advisor hat on. Does that make sense?
Josh: It makes perfectly good sense.
So, I have E&O insurance but I have a claim that goes past that, is there something that I can be doing with that particular–you know, again, professional service engineering, architects, financial advisors. They all are at risk personally. And most of the time, especially with people like architects or engineers, they don’t have enough E&O insurance to cover because they can’t buy enough. Is there something they can do to protect their assets over and above having insurance?
Lin: You know, there are some lawyers that will say, “Absolutely not, it’s too big a risk. Do not do that. Don’t behave in that way. Don’t hold yourself out as a coach when really you’re a financial advisor.”
And again, Josh, that is a State by State regulatory body that’s going to be making the rules so you must know and become familiar with your State business offices. And, if you have to, call them. Find out what are the rules and regulations with regards to your particular profession.
Josh: Okay. So, let’s go into what you should do yourself and what you need to hire a lawyer for. And if you’re giving asset protection advice, generally, what do you tell people to do themselves and what do you say, “No. You really should hire a lawyer to do that”?
Lin: So, with people just starting up – and I know that you have listeners who’ve been in business for a while, it depends on what your tolerance is. Some people will say, “I don’t want to know. I just want my lawyer to do everything.” Some people say, “No. I can’t afford it or I don’t want to spend money on that. I want to do it myself.” So, there is, like I say, a lot that you can do yourself. But you must have those foundational things in place, like those legal documents on your website. And I’m assuming that your listeners have a web presence?
Josh: I would assume they do.
Lin: Right. I mean, most people—like, even bricks and mortar, they’re all coming online. And so, those legal docs have to be in place. You have to consider trademarking your company name. And that, I think, is something that is worth hiring a lawyer to have it done for you.
You can do so much of the work upfront and then go to a lawyer and say, “All right, I’ve checked all these databases myself. I know that so far so good.” Because, I think that you can often do what I call a “knockout search”, right? Like, you can look up askjoshpatrick and say that has been trademarked. Somebody can go online and find that and that’s like a knockout search. It’s like, “Okay, I can’t use askjoshpatrick, that’s already being used.”
However, if it’s not, there’s so much that you can do in looking at all the search engines and finding out if anyone’s using it at all. If the coast is clear, then I would approach a lawyer and say, “All right, I’d like to trademark my brand, my business name, my logo, my slogan” whatever it is. And you may want to do that also for some of your signature products because the internet’s crazy. As you know, Josh, people are just going online and scraping all that cool content off of one site and slapping it on their own.
So, those are some of the things that you can do. There is a lot though that you need to know. But knowledge is power. The more you know, the more you can protect yourself and stay one step ahead of the bad guys, is what I say.
Josh: So how do you learn all this stuff because, you know, when you get to asset protection it gets pretty complicated pretty fast. So, where would you go to learn this stuff?
Lin: When I first started my online business, I had to really figure out a whole other aspect of the law. And that was all the stuff that would apply to the internet. And it was crazy, Josh. There was so much information out there. So much of it was contradictory, I thought, “How does someone who is not a lawyer even begin to figure this stuff out?”
I mean, it took me a while and I culled through all the information. I went right to the horse’s mouth as far as the law was concerned. And then I created all the information for myself so that I had all the relevant law. Then, I thought, “Why not make this available to online business people who are probably even more overwhelmed than I was?” because I was able to sort of sift through all the—you know, some of the stuff that was wrong – blatantly wrong, and put it all into a document. And that’s why I decided to create a signature product that is called the “DIY Legal Toolkit” and it’s all in there. You could go online and learn this stuff but it will take you hours if not weeks to figure it out. It’s very complicated.
Josh: So, if I’m a business owner and I’m saying, “Okay, I’ll either assign somebody or I’ll do the DIY thing myself.” What kind of fees would they expect to pay with you?
Lin: To do it yourself, the toolkit that I offer, I offer that for $397, so that is pretty much the cost of a good lawyer for one hour. If you were to go have a lawyer do just those three documents on your website, that could cost you $1000 or more and I’m being very conservative. I think it would cost a lot more. Lawyers charge a lot of money. And if they’re on the $200 to $400 range which is pretty standard, you can imagine it’s going to rack up a lot of hours to have this done. Having a contract created, that could be well over $1000 -$2000 depending on how complicated the contract is.
In my toolkit, I have a guidebook that talks about contract law, how to do it. If you’re a service business, here’s sort of a template and then these are the things that you need to put in. Based on your own business, these are the things you can put in. If it doesn’t apply to you, take these out. And then all boilerplate language should go into that contract to protect the business owner.
Josh: So, it’s going to cost me $395 to do a DIY – do it myself asset protection. If I was going to go to a lawyer and have them do everything that you’re recommending in your DIY thing, what would my cost be? Approximately, we don’t exactly?
Lin: It depends on the lawyer. And don’t you hate it when lawyers say, “It depends”?
Josh: Well, most of us say that because that’s the answer to it. But what will be a 90% range, say?
Lin: I would say that you would not be able to get everything done that I give you in the do-it-yourself toolkit. You wouldn’t be able to get that done by a lawyer for less than $2000. I can’t even imagine $2000. I’d say it’s closer to $5000.
Josh: Okay. Well, that would be my guess also for basic stuff.
Now, some of our listeners are saying, “Well, I’ve got some really significant assets.” Should they be considering things like asset protection, trust and more advanced planning techniques?
Lin: Absolutely, Josh. And although this is beyond the scope of what I do – absolutely, the more you have, the more you are vulnerable, right? So you absolutely should talk to a financial planner, someone like yourself, who can sort of walk them through the value.
It’s amazing to me that people don’t even know the value of their own assets. You know, I think, the first step would be to start with an audit. And then, take that to either a tax advisor, a financial advisor, a tax lawyer and have them sort of advice you and then take the steps – the extra steps, whether it’s to create a trust or whatever it may be, but don’t keep your head in the sand. It’s just too much is at stake.
Josh: Well, Lin, I’m sorry but we are completely out of time and we could probably spend hours on this topic because it’s a huge topic. It’s an important one. And I can tell you that, having been the subject of a bunch of lawsuits over my 40 years in business, having a clear understanding of what the law can and cannot do to you is one thing but protecting your assets before you even get into that situation is more important.
So, if folks want to take advantage of your DIY or even just have a conversation with you, how would they go about doing that?
Lin: So, my website is coveryourassetsonline.com – don’t forget the online part, at diylegaltoolkit.com. Even to look at that, that will give you a real outline of some of the things.
You’re absolutely right, Josh. This is dense. There’s a lot that goes into this. And so, I give you an idea of what’s involved on those two sites.
Josh: Cool.
So, thanks so much for your time today. I really appreciate it.
And I have an offer for folks who are still listening. I hope you are. That is, we have a 1-hour free audio CD course called Successes to Sustainability. And to get that is really pretty easy. All you have to do is text – take out your smartphone, put out your messaging app and text SUSTAINABLE to 44222. That’s SUSTAINABLE to 44222. You’ll get a link, you click on that link you give us your address and we’ll mail out your free audio CD which you to listen to in your car. It’ll take you about an hour. And my promise is you’ll learn some cool things that you may not have known before.
So, thanks a lot. You’ve been at the Sustainable Business. This is Josh Patrick. And I hope to see you back here really soon.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at jpatrick@askjoshpatrick.com.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.
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