By Lee Resnick, Resnick Associates
The most critical action a business owner can take to assure the continuation of a business is implementing quality estate and succession planning. Although this may appear to be a rather simplistic task, the primary reasons that business owners and their families ultimately either lose their business or end up with a business that has been ‘watered down’ in value is because—you guessed it—missed estate and succession planning opportunities.
Why? Two Reasons:
- The first reason is pretty obvious. The business owner never took the steps needed to implement an estate and succession plan.
- The second reason is not so obvious because it affects business owners who actually took the time to implement a plan. Many of these business owners are unknowingly sitting on financial and business time bombs. How can this be? Examples include:
A. Planning that was set up YEARS ago and it is now not only outdated, but highly ineffective.
– Has the business increased in value since the plan was put in place?
– Have family members come into or left the business since the plan was put in place?
– Has there been a change to tax law?
B. The business owner only has a “general idea” of how the plan works and isn’t aware that other planning techniques would produce much greater end results.
C. The plan was set up incorrectly.
D. The plan, although an overall good plan, is missing one or two key components and this oversight may very well cause significant and expensive problems.
In our combined 40 plus years of working with highly successful business owners throughout the United States, we have consistently seen that too often a business owner works for decades with the intention of passing the business to the next generation and have an enjoyable retirement, yet has never taken the proper steps to assure that it happens.
It is sad and unfortunate when business owners who have provided valued stewardship of their businesses over decades ultimately lose the business to unforeseen taxes or loses an exceptional amount of working capital because of planning that was either missed entirely or set up incorrectly.
What is often lost on the business owner is the effect they have on sometimes hundreds or potentially thousands of people. The business owner that does not have a quality estate and succession plan creates problems not only for their own families, but the families of their employees as well.
At The NATSO Show, Lee and Terry Resnick will be on hand in the Human Library for private consultations. As nationally recognized estate, succession, and life insurance advisors, The Resnicks can offer advice on existing planning, making sure attendees are on the right track, and uncover areas for NATSO members to addressed.
To reserve your individual consultation in the Human Library, contact Kimberly Roberts at firstname.lastname@example.org or (703) 739-8573.