A successful business Exit Plan achieves three important owner goals:
A successful Estate Plan achieves three important personal goals:
Once owners see that the two processes share the same goals, they can appreciate how to leverage the time and money they spend developing their exit plans into the design of their estate plans.
For example, when you engage in exit planning you most likely determine your objectives and secure an estimate of value on your business before you start working to create more business value. In securing an estimate of value, you possess a piece of information that’s critical to both your business continuity and estate plans.
Thinking of exit and estate planning in tandem brings the owner’s entire picture into focus:
Your estate plan can manage these issues, but does it?
As you recall, another goal of the exit planning process is to protect your assets from creditor attack during your lifetime and to minimize tax consequences upon a transfer of your ownership. Does your estate plan also work to minimize creditor risk—not only yours but that of your heirs? It is possible to achieve these goals through both your exit and estate plans.
It is worth repeating that you must devote the same energy and analysis to lifetime transfers (benefiting you) as you do to a transfer occurring at your death (benefiting your family). Since both planning your exit from your business and planning your exit from this life are based on the same premises it can be relatively easy to develop a consistent outcome.
Two last issues may help you to determine which task to undertake first:
There isn’t one right answer to the “Estate or Exit Planning?” question. In the end, you must take action on both fronts since a failure to act in either creates lasting problems not just for you, but for your business and for your family.
The content is for informational purposes only and does not constitute legal, tax, accounting, investment or financial advice. Please consult an attorney, CPA or wealth advisor about what is best for you. This White Paper is provided to you pursuant to a licensing arrangement. 2017 Business Enterprise Institute, Inc.