Ultimately, a business owner must transfer a successful enterprise to new management while carving out the means to support personal wealth and estate planning. This article provides the general steps to help you achieve these two critical but distinct objectives.
Identify Personal Goals: Often, the dedicated focus needed for running operations delays this high level self-analysis for too long. How much personal wealth needs to be accumulated to live the desired retirement lifestyle? How much should be left for heirs? Will exit timing align with the optimal market condition and tax environment? Questions like these need to be answered honestly with an expert wealth advisor to ensure that your business plan matches up with your personal wealth and estate plan.
Develop the Timeline to Achieve Goals: A detailed look at both personal finances and business finances will help provide the timeframe for achieving the goals identified. At what point should you cast around the discerning eye and realize that your personal financial goals have been met, and that the time to step away may have arrived? Perhaps it's when your heirs or employees have proven themselves up to the task of management. Maybe the company itself has reached a level that requires new expertise, or the current economic or market circumstances indicate an ideal selling opportunity to an outside party.
Often, it's the introduction to wealth planners that prompts owners to realize that they've passed the personal finish line. Sometimes, the spouse of the owner will provide the impetus for retirement upon hearing trusted advisors say that goals are met and exceeded!
Realize the Full Potential of your Business: Crossing the finish line means that you have built a valuable business. Winning the race means you have extracted maximum liquidity on the full market value of your equity. Examples include:
Personal Wealth and Estate Planning: After a successful career keeping company and personal finances separate, you will want a seamless transition that maximizes value, minimizes taxes, provides security for your family, and leads to a fulfilling retirement lifestyle. In parallel with the succession period, you will need experienced legal, accounting, and wealth advisors hard at work with estate, investment, and tax planning. Complex state and federal laws and regulations make trust planning a "must" for owners who care about minimizing taxation and protecting hard-earned wealth.
This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service or as a determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situations, and particular needs. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.