When “What If” Becomes “What Now”
One of the most important – but often ignored – reasons for preparing for the future succession of a business is to minimize the fallout from the unexpected. It’s understandable that preparing for these types of situations usually falls to the end of the to-do list. Just the thought of such circumstances is enough for many to choose to ignore and focus on the tasks of a more immediate nature.
Yet, the potential for such instance is there. It’s unpleasant to think about what may happen should you as a business owner get seriously hurt in a car accident, contract a life-threatening illness while travelling, or take an unexpected turn that leaves you incapable of managing the business. While as tragic as these instances can be, the impact can go beyond just you as a business owner, and beyond your family, to affect the livelihood of your business, employees, and even your customers.
“One of the most important – but often ignored – reasons for preparing for the future succession of a business is to minimize the fallout from the unexpected.”
Things don’t always go according to plan. Therefore, the business has a much better chance of surviving if the owner has made preparations, in advance, for it to continue without him/her there. How? With careful planning that encompasses all aspects to prepare for the ‘what if’.
- Succession Planning – Develop a strong and capable management team and delegate responsibility to the team.
- Insurance Planning – At least bi-annually, life and disability insurance policies should be reviewed to ensure adequate coverage in case of death, illness, or disability. Insurance strategies can often include funding the premiums using corporate assets in certain situations. This planning also involves the preparation and updating of proper wills and powers of attorney.
- Tax Planning – A proper corporate structure might allow you to multiply the Capital Gains Exemption on the sale of company shares. As a result, capital gains tax could possibly be eliminated entirely.
- Exit Planning – Develop and communicate plans for the business so that key stakeholders (family and senior management) know and understand your wishes. They will then be able to execute them in case of disability or sudden death (yes, that happens, too).
- Financial Planning – A solid financial plan could establish family assets in addition to the business investment. This way, debts can be managed to maximize interest deductibility.
Put the plans in motion to mitigate the implications of an unexpected, yet potentially disastrous situation. After all, “What if” can turn into “What now?” very quickly – but with the right team of proactive advisors in place, you can avoid a nasty outcome.
How we can help you
When we say our approach is holistic, we mean it. It’s centered around you. Not just your company; not only your legacy, you. We advise business owners and their families both personally and professionally. Our professionals, (from wealth management, valuations, taxation and estates, to various other service lines) work collaboratively to provide advice that makes the most sense for you and your objectives – because we know that your work affects your personal life, and vice versa – they are of equal importance. Through early, comprehensive planning, our professionals assess every situation and present options to help you make informed, strategic decisions to make the most out of your unique situation.
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