Wealth Entanglement

Is your personal capital exposed to Texas regulatory liability?

GORDON was asked to help families rebuild their portfolios after the 2000, 2007 & 2020 crashes. Some of them had lost it all as their wealth was held entirely in one place with no protection.

I can spot where your business risk threatens your personal life, how much of your net worth sits inside your business, how much of your retirement is dependent on a sale of your business, and if your insurance covers stealth clauses in personal guarantees on business loans.

1) Most of your net worth is held in a single illiquid asset

ISSUE: What liquid assets would be left for you if your business lost its value tomorrow?

WHAT IF: If your business takes a serious hit, will your personal financial health also take a hit? When this happens, otherwise strategic decisions to sell, hold or restructure become necessary and are made under duress.

COMPLICATIONS: It's now harder to qualify for a business loan. So securing a buyer's commitment to finance a sale or getting a sufficient line of credit is no longer certain.

TEXAS TRIGGER: Unauthorized staff running an IV drip causes insurance carriers to deny coverage, pushing claims directly onto your personal guarantees.


2) "Sell the business" is your primary retirement plan

ISSUE: What's your backup plan if the business isn't ready to sell on your timeline?

WHAT IF: What if there's no buyer when you're ready to sell? If you don't have a pool of assets outside of your business, you'll have to work longer or retire on far less.

COMPLICATIONS: If you're at least 50 and pay yourself more than $150k a year, a new rule changes how you can save. The "catch-up" savings that once lowered your tax bill must now be saved after tax, per 2022 SECURE 2.0, Section 603.

TEXAS TRIGGER: Statutory non-compliance under TMB Rule 169.28 (like missing posted notices or flawed PAAs) gives plaintiff attorneys instant grounds to strip away your LLC liability shield.


3) Your personal debt is serviced by your business cash flow

ISSUE: How many months could your bills be paid if your business income stopped?

WHAT IF: With an illness, lost contract or a slow season, bills can drift past their due date. Most business owners never stress-test this scenario since no one ever showed them how.

COMPLICATIONS: Any decision to refinance debt locks in today's higher rates, as building a reserve can take many months. Credit lines are more difficult to secure as lenders now carefully scrutinize variable income.


4) Insurance coverage hasn't kept pace with business growth

ISSUE: When was the last time you critically assessed your insurance coverage?

WHAT IF: If you are disabled or die, the coverage bought years ago can only fall short of what's needed to fund a buyout, replace income or keep the business running.

COMPLICATIONS: Age and health changes may trigger the need for new underwriting with higher premiums, exclusions or even denial of coverage. You'll need a current valuation and multiple partners may force the agreement to be restructured.


5) Your investments move in the same direction as your business

ISSUE: Would your personal market positions and business interests take the same hit in a bad year?

WHAT IF: A downturn hits your industry while your stock portfolio is weighted toward the same business sector. So nobody wins if your personal stock holdings and business simultaneously take the same hit.

COMPLICATIONS: Diversifying away from your industry can trigger capital gains taxes. And creating a diversification strategy can also difficult without professional guidance.


6) No written continuity plan if you can't run the business

ISSUE: What happens to your business and your personal finances if you suddenly become unavailable?

WHAT IF: Illness or injury can create a leadership void in which no one exists with the authority to make decisions. Your family can then be forced into expensive public court-supervised guardianship proceedings.

COMPLICATIONS: A rushed sale or frantic borrowing has consequences. Key employees and clients can be spooked by the sudden change and may look elsewhere. You may also lose leverage when negotiating a loan.

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LET GORDON DETERMINE exactly where your business risk threatens your personal life. Use his $897 Wealth MRI Risk Assessment report to isolate the unhealthy touch points between your personal holdings and your business. Gordon can optionally help you build a wealth firewall to stop business debt from bleeding your assets.

  • Seek reduction in guaranteed backing
  • Keep business afloat if a partner exits
  • Reset insurance before gap is exposed
  • Build a plan that holds in a rough year

Book a 30m call with Gordon >

I can use this section to provide stories of
"personal guarantees gone bad."