Personal Wealth and Estate Planning
Step 1 - Identify Owner Objectives
The most common objectives for business owners working on this Component of their planning are related to family
income, personal assets and family harmony. Typical owners want to maintain or replace the income stream they derive
from the business even after they are no longer in an ownership position. Protecting personal assets from liabilities
of the business can also be critical to wealth preservation. Finally, managing transfers of assets during life and at
death, as well as managing expectations of family members, are frequent objectives given by owners.
Step 2 - Identify Business and Professional Financial Resources
In this Component, current values of both business and non-business assets, as well as projections of future
values, are critical to planning. Valuation techniques, and possibly value discounting, provide the parameters
within which planning can occur. Estimates of future values, estate tax liabilities and income streams generated
by business and non-business assets frame expectations and strategies in this Component.
Component
Business owners represent a somewhat unique situation in personal wealth and estate planning. Their businesses
typically represent a significant portion of both their personal net worth and their annual income. Owners with
children active in their businesses add yet another layer of complexity to their planning. Protecting personal
assets, managing wealth both now and in the future and promoting harmony in the family are all addressed in this
Component to create a well-balanced plan that addresses these interlocking issues.
Implementation and Follow Through
The business owner and his or her advisors work together to design and finalize the Recommendations that will
drive the owner toward reaching his or her objectives. Once Recommendation details and decisions are complete, an
organized and systematic implementation of each Recommendation follows. Finally, they focus their attention on the
next Component that will fit into the owner’s comprehensive Exit Plan.
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What Business owners typically say…
"My business and personal assets are so closely intertwined that I can't plan for one without also planning for the other in the event of my death."
"I want to balance my estate among my children — those involved in the business and those who are not — in a way that is fair."
"I want to protect my heirs from the effects of estate taxes, but I don’t know how to do that." |
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