How Business Owners Can Achieve The Best Results From Estate Planning

How Business Owners Can Achieve The Best Results From Estate Planning

Engaging in estate planning is especially important for business owners. Having the right plan in place is the key to achieving the best results.

To keep everyone focused and on the same page throughout the process, you should consider working in conjunction with a team of trusted advisors: accountant, lawyer, investment advisor, banker and insurance advisor. Having the right people at your side is the key to yielding maximum results, keeping costs low and ensuring nothing is overlooked.


Wills are the cornerstone of any Estate Plan. Business owners should have a Business Will, Personal Will and Power of Attorney for personal care and property.

Shareholder Agreements

Properly drafted shareholder agreements can save business owners a lot of money. If there isn’t one in place it could ruin a business. You may have great relationships with other shareholders, however this can change with retirement or sickness. In the case of death, your partner may not have your family’s best interest at heart.

Life Insurance Products

Often products are bought in isolation, leaving people believing they are properly protected. Business owners often believe group Long Term Disability coverage is sufficient, although in reality it actually discriminates against them and the ability to collect at claim time is limited at best.

Critical Illness, Disability and Long Term care insurance are excellent sources of protection when properly customized to meet individual needs. It is essential to obtain these products in a tax efficient manner. Working with a professional who represents at least three insurers and understands legal as well as tax planning will yield the best results.

One insurer’s decision is not every insurer’s decision when assessing risk. We have seen different senior underwriters at insurance companies yield different offers for the same client: (1) one insurer does not make an offer (2) one insurer offers with extra premium (3) one insurer will issue a standard contract.

Common Reasons Why Some People Avoid Estate Planning

1. They think they don’t have enough money for estate planning.
2. They do not want to think about dying or becoming disabled.
3. Family issues (situations where some children are involved in the business while others are not).

What Can Happen If No Plan Is In Place?

Families can get exposed with litigation after a death. Families are often divided due to not having a clear plan in place and in many cases money will be wasted on litigation.

If you are a US citizen, this can bring a whole different level of complexity and the IRS is not shy to slap big fines. Ensuring you have a plan in place and working with a US tax specialist can save both money and grief.

If you do not have an estate plan, after death your business could be left in jeopardy, sell for pennies on the dollar, your widow and children may not be properly taken care of, they could be forced to drastically change their lifestyle, and business partners may have to look for new work.

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