Seven Common Mistakes in Estate Planning—And How You Can Avoid Them (Segment I)

Preface: Featuring Nevin Beiler, Esquire this week, a a PA-licensed attorney who practices primarily in the areas of estate planning, business law, and nonprofit law. In a three segment series, you have the opportunity to learn how competent legal counsel can lead to more rewarding decision making, e.g. applied to estate planning counsel.

Seven Common Mistakes in Estate Planning—And How You Can Avoid Them (Segment I)

By Nevin Beiler, Esquire

“You must learn from the mistakes of others. You can’t possibly live long enough to make them all yourself.” – Samuel Levenson.

We all appreciate when we can learn from the mistakes of others, because avoiding those same mistakes can save us a great deal of money and heartache. It is no different when it comes to estate planning. It pays to learn from those who have gone before us.

To help you get started on your estate planning journey, or to assist with your current plans, let’s look at some of the common mistakes people make when it comes to estate planning, and what you can do to avoid these mistakes.

#1. Failing to Plan

Doing nothing is probably the most common mistake people make when it comes to estate planning. Everyone should have a plan, not just the old or wealthy. Doing nothing is easy and cheap—until you are gone and your heirs are left with a mess to sort out. If a person dies without a will, the law provides a court-supervised process to distribute assets, and a judge appoints someone to administer the estate and someone to be a guardian for minor children, but what a judge chooses is not always what the deceased would have chosen.

Consider the following scenario: A middle-aged man dies and leaves a wife and three young children. He did not have a will, but he always told his wife that if he died she could sell his business and live off of the proceeds of the sale until she finds a way to make a living. The business eventually sells for a liquidation price of $400,000, but the widow discovers that under the laws of Pennsylvania she is entitled to only $215,000. The children equally split the remaining $185,000, and a guardianship is established to manage the children’s inheritance until they turn 18. Also, the husband had purchased the family home before they were married, and the wife’s name had never been added to the deed. This means that the children are also entitled to own a portion of the home, rather than the widow owning it outright. A simple estate plan can avoid this complicated result, and ensure that the husband’s wishes are carried out.

Even if a married couple owns all assets jointly, and therefore the surviving spouse can receive everything, some simple planning is still important. In the event both parents pass away, a plan can ensure their children will be cared for by trusted caregivers, not whomever a judge decides to appoint as guardian. Also, a plan can reduce the chance of siblings, children, or in-laws fighting in court about what should happen to children or assets. Furthermore, having a plan in place usually means that administering an estate after death requires less work and is less expensive.

Discussing your goals with a trusted estate planning attorney can help you think through the unique challenges of your situation and adopt a plan that will be a blessing both to your heirs and to your peace of mind. And then, don’t forget to periodically review and update your plan as necessary. Remember, failing to plan is planning to fail.

#2. Not Communicating About Plans While Living

Adopting an estate plan early in life, and then updating that plan throughout life as circumstances change, is a great first step. But don’t forget to communicate your plan to your heirs and key people like executors and guardians. This can avoid surprises and hurt feelings later on.

Prior to naming someone to serve as guardian of your minor children, it is important to discuss this appointment with them to ensure they are able and willing to serve. Also, talk to your executors to ensure they feel comfortable in that role, and that they know where to get help if they need it. If the people you name are not able or willing to serve, then naming them in your will is useless.

Also, consider having a family meeting with all your heirs to discuss your plans for your estate. If you are not comfortable sharing all the details, you do not need to, but be as open and detailed as you can. Discussing your plans with your heirs can avoid unpleasant surprises and conflict down the road. It can help reduce misunderstandings that can arise after you are gone, and might raise some issues that you missed in your plans that can then be addressed before you pass away.

Many people are raised in a setting where estate plans, and money matters in general, are not often discussed and perhaps take on an air of secrecy. However, this can be harmful to relationships if it results in disagreements or unmet expectations later on. Make the effort to communicate.

Nevin Beiler is a PA-licensed attorney who practices primarily in the areas of estate planning, business law, and nonprofit law. Nevin is part of the conservative Anabaptist community and is passionate about practicing law in a way that builds the Kingdom of God and is consistent with the Anabaptist faith. He lives and works in Lancaster County, PA, and can be contacted by email at or by phone at 717-287-1688.


Cash Basis Accounting and Taxation

Preface: Cash basis accounting is applicable to certain construction businesses and other qualifying enterprises. When applicable, cash basis tax accounting can provide certain tax benefits. While retail and wholesale business are required to account for inventory with accrual accounting, cash basis is simple and taxes only income on cash received.

Cash Basis

Credit: Jacob M Dietz, CPA

The cash basis of accounting is an accounting method that determines when a taxpayer should report income and expenses. Correctly using the cash method can avoid trouble in an audit. Cash basis taxpayers generally report income when received and report expenses when paid. There are various exceptions and rules, however, and this blog explores some of them.


Cash basis taxpayers report income when it is received, even if the income was only constructively received. The IRS states that “Income is constructively received when an amount is credited to your account or made available to you without restriction.” What are some examples of cash receipts?

  1. Cash is handed to you or your employee
  2. A check arrives in the mail on December 28th
  3. A check is handed to your employee
  4. A customer pays with a credit card, and the amount is electronically deposited into your bank account
  5. A customer writes you a check on December 31, and tries to hand it you as payment for their purchase

In all these examples, and there would be more we could list, the cash basis taxpayer received the income and should report it on the tax return. It doesn’t matter if the money made it to the bank or not. What if the taxpayer refused to take the check offered by the customer in example 5 and told the customer to mail it next week? It should still be reported as income for the year because the taxpayer had full control of it.

The cash basis taxpayer reports income received even if the taxpayer didn’t completely earn it yet. For example, suppose you are working on a construction project, and are almost finished at the end of the year. You plan to come back for one day in January to finish. The homeowner happens to see you, and hands you a check for the final payment on December 31. That check should be reported as income, even though you still have some more work to do in January to fully earn it.


There is an exception to reporting income for certain payments, such as a security deposit. Suppose a tenant gives you a security deposit. According to the contract you signed with the tenant, you will hold that deposit in an escrow account and return it to them at the end of the lease. In that situation, a cash basis taxpayer would not need to recognize the deposit as income.


Taxpayers generally deduct expenses when paid under the cash method. Assume a taxpayer receives a bill in the mail for utilities in December, but doesn’t pay it until January. The taxpayer takes the deduction in January.

If a taxpayer uses debt, such as a line of credit or bank credit card to pay an expense, the expense is deductible when paid, not when the debt is repaid. For example, suppose a taxpayer uses a bank credit card to pay the utilities bill in December. The taxpayer then pays off the credit card in January. The utilities would be deductible in December when they were paid with the credit card.

Can a taxpayer prepay 5 years of expenses in one year, and deduct them immediately? No, the IRS has a 12-month rule that limits a deduction to amounts “that do not extend beyond the earlier of the following.

  • 12 months after the right or benefit begins, or
  • The end of the tax year after the tax year in which payment is made.”

Another notable exception is inventoriable products. Some expenditures are inventoriable, and cannot be deducted until the year sold, even if they are purchased in the year before sale. Inventoriable items are items that will be sold to customers.

The cash basis method is generally simpler than other methods of accounting. As you can see, however, even the cash basis has its quirks and exceptions. Understanding the cash basis helps taxpayers comply with the law while possibly still deferring some income tax.

This article is general in nature, and does not contain legal advice. Please contact your accountant to see what applies in your specific situation.

Trust-Based Selling – An Abbreviated Book Report — Segment II

Trust-Based Selling – An Abbreviated Book Report for At-Work Entrepreneur’s

 Preface: Trust-based selling is far beyond common processes and laws of selling; it is in a fundamental fashion, the human spirit of selling. Trust-based selling is a people process; it’s about living and working [selling] with a set of core beliefs, values, and principles, gilding trusted behavior.

Trust-Based Selling – Segment II

Report Credit: Donald J. Sauder, CPA

Why should buyers easily trust sellers? Sellers objectives have one purpose often — to get a sale. Therefore, sellers most often do not have the buyers interest at heart. Trust-based selling is built on a foundation of true customer focus, collaboration, transparency, and a far sighted perspective. You cannot use trust as selling tactic, solely. Your customers are smart; they can see rather quickly whether sellers are wearing self-centered shades in the conversation, and they know intuitively, even if they can’t point to what’s wrong – that a seller usually cannot be trusted.

Trust is no easy matter because it based on beliefs and principles, not on techniques or processes. Trusted based selling is behavioral selling. Trust-based selling is matter of living your beliefs, values, and principles to behave in trustworthy manner. This requires consistent principled behavior, not a fabricated façade. [The behavioral selling principle rests well with certain groups of sellers, e.g. Amish business owners intuitively approach selling while living their personal beliefs, values and gilding principles – each day  {authors report note}.]

Collaborative approaches to selling are necessary to be successful with trusted based selling. Trusted seller need to pick-up the phone and ask what the buyer wants, and how you can help the buyer. Some sellers fear collaboration, they have too much ego, and can’t share the pie; or they fear lack of knowledge; fear collaboration will help competitors, or result in lower prices. These fears are only in the sellers mind, and not objective marketplace conditions.

A far-sighted perspective makes you willing to make certain investment in relationships, and obtain better data for a higher return on investment. Fear that there will not be an opportunity tomorrow or next year; or that they [the seller] could be taken advantage, i.e. how will I benefit; or fear of not getting the reward right here, right now, because it might not come up again; these are the results of a lack of trust. A lack of trust results in fear.

Transparency builds trust. Secrets breakdown trust. Being transparent and letting buyers into your business, and into your thinking — builds trust. Transparency removes doubt about motives, helps your clients know you’re telling the truth, builds your reputation; and since your flaws and strengths are evident in transparency, people can make sensible judgement about you. Clients reciprocate by being open and above board as you gain credibility.

It is not surprise that not everyone practices transparency. Yet, this is how you build a trusted-based selling relationship. After all, is it prudent to show all your selling cards to those on the other side of the table? Again, this transparency resistance is a result of fear. The courageous seller who doesn’t fear rejection, doesn’t fear losing control of a sale, or doesn’t fear helping competitors, will be perceived as an honest and trustworthy seller – and that my friend, is trust-based selling.

Buyers will trust you not solely on your ability to get things done; because trust-based selling it is not a business process or a business system. It business neutral. Trust-based selling is far beyond common laws of selling, it is essentially the human spirit of selling. Trust-based selling is a people process; it’s about living and working [and selling] with beliefs, values and principles gilding trusted behavior.

Trust-Based Selling – An Abbreviated Book Report for At-Work Entrepreneur’s

Trust-Based Selling – An Abbreviated Book Report for At-Work Entrepreneur’s

Using Customer Focus and Collaboration to Build Long-term Relationships, Charles H. Green, Copyright 2006

Preface: At last, a sales book based on how adult, intelligent people actually buy. An Important contribution that challenges the effectiveness of much of the current sales practice, and shows how to do it better. David Maister, Retired Harvard Business School Professor

Trust-Based Selling – Book Report Segment I

Book Report Credit: Donald J. Sauder, CPA

In order for successful customer relationships to work, sellers have to care – honestly and deeply – about customers. Successful, flourishing salespersons know the trick is easy – you have to care – honestly and deeply. The solution, simple to state, is hard to live.

Three pillar questions in great sales are 1. What do buyers really want? 2. Why don’t they say so? 3. Why, if selling expertise isn’t the best approach, is it the dominant one? Customers and clients make decisions based upon trust. The best businesses gain sales from the trust they develop with customers. What buyers really want is to buy from someone they trust. Trust is developed with understanding the customer needs, asking the right questions, and demonstrating expertise – rather than talking about it.

An appreciation for what is best for the client or customer, and putting their needs first, always leads to more benefit to you and your business than putting your needs or your business needs first, e.g. Is your solution the ultimate for the need of the customer, or simply your month’s sales quota?

Studies show that to achieve duplicative sales successes you do not even have to deliver on all the wants and aspirations; after all, customers don’t expect you to perform miracles. Yet, you must understand and appreciate them for who they are. You need to connect, understand and care. Customer care is the key phrase. Care includes paying attention, showing interest, exhibiting curiosity about things important to the customers, e.g. seat warmers for car shoppers, complaining about cold winter temperature.

Trusted based selling is about doing business in such a way that you’re worthy of the customer’s trust. You must be personable, and genuine; and let the customer experience or sample what it’s like to buy your goods or services.

What buyers really want – even when they don’t say so – is a seller they can trust.

Trust based selling require solid competence, credibility, and reliability; and most important a sense that the seller cares about what is best for the buyer. Trust based selling is built on helping the buyer make the best decision or the purchase.

Buyers are people. They have fears of missing something, fears of being ignorant, fears of making a bad decision, fears of being taken advantage of. Trust based selling, eliminates fear, and replaces it with the confidence; the confidence of having made a good decision, long after the decision occurs.

Here the benefits of building trust:

  1. Reduces challenges to competitor purchases
  2. Minimized challenges on pricing
  3. Minimized being second guessed, or double checking of facts
  4. Increases customer willingness to listen
  5. Helps customers share information that is useful to the seller
  6. Improves chances your phone calls will be answered
  7. More forgiving attitude when mistakes are made
  8. Customers will seek you out take your advice when buying
  9. Help with exceptions to the rule as appropriate
  10. Give you preferential status

Trust is no longer a commodity in business. Trust is becoming an invaluable resource.

Pressures from a competitive, seller centric marketplace, with a greater gain attitude, and the risks incorporated when working to build trust, all hinder successful sales.

Good salespeople overcome these obstacles and the reap benefits for their customers, and ultimately themselves too.

Trusted salespeople have always been valuable, and will become more valuable in the future.