Estate Planning--Do It Now!
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Estate Planning--Do It Now!

Putting Your Affairs In Order Starts Today

Ask yourself this question: If I died today, have I taken the appropriate steps to provide for the smooth and effective transition of my business, and to protect my family? If you talk to bank officers in the trust departments of major commercial banks, they will tell you horror stories of business owners who died without an effective--or current--estate plan and left the business in shambles and the family with loose ends.

No matter what your perspective, estate planning is a vital business function that involves a series of steps. Furthermore, these steps need to be repeated periodically depending on changes in the laws, your family situation, and the evolution of your business.

The estate planning process consists of a series of decisions with the goal of transferring assets to heirs with a minimum of cost. It is a dynamic process with two basic components: 1) accomplish stated desires and objectives, and 2) minimize the costs of transfer. As such, goals and desires should always assume priority over costs.

Consequently, the first responsibility for the owner of a business is to determine what will happen to the company upon their death. There are three primary alternatives: 1) sell or merge, 2) liquidate, or 3) continue the business, through associates, for the benefit of heirs.

Once this decision is made, the business owner faces four primary estate planning considerations in addition to the concerns common to everyone. They are: 1) successor management, 2) liquidity to pay death costs, 3) transfer of assets to spouse/children, and 4) valuation of the business.


Each of the above considerations plays an integral role in the estate planning process. The central focus of this process is to develop and maintain a complete and current will. As most of you know, a will is a statement of desires.

Many people seem to feel that a will is appropriate only for large estates. This is simply not so. Without a valid will, your estate will be settled according to the laws of the state--and these laws will not likely coincide with your particular desires. Furthermore, a will takes the "guesswork" out of settling estates, and it avoids long-lasting arguments and feuds among family members.

Remember, probating a will is a stressful experience for a family at a time when the members are not at their "strongest" and there's lots of room for misunderstandings. In addition, you never really know your brother until you settle an estate with him!

Tools for estate planning

To address the basic problems of estate planning effectively, business owners have a variety of tools at their disposal. Among these are: 1) gifts, 2) life insurance, 3) trusts, 4) pension and profit-sharing plans, 5) deferred compensation plans, 6) buy/sell agreements, 7) preferred stock recapitalizations, 8) installment payment of death taxes, 9) corporate redemptions, and 10) pre-death sale contracts.

Clearly, the appropriate mix of available alternatives will be unique to each individual's situation. However, an understanding of the basic options is central to achieving the desired results.

Estate planning team

Utilizing the proper group of professionals is also central to creating an effective estate plan. Each of the following professionals has a key role to play, and you should consult them regularly. This group includes 1) estate planning attorney, 2) accountant, 3) banker, and 4) insurance agent. Together--and in accordance with your desires--this group of specialized professionals can work with you to assess the advantages and disadvantages of each particular alternative until you create the unique mix of options that is right for you.

Action steps

The estate planning process is costly and time-consuming. Numerous steps must be taken before the plan is complete. The process includes:

  1. Assessment of assets and liabilities
  2. Liquidity analysis
  3. Assessment of dependent support required
  4. Statement of goals and desires
  5. Plan for four key concerns:
    • successor management
    • death costs
    • dependent income
    • valuation of business
  6. Review existing insurance
  7. Evaluate options available
  8. Select a plan and draft documents

Procrastination is the enemy; time is the weapon. Why is it so easy to say "I'll do it later, when I have more time?" Perhaps it's cost; perhaps the complexity of the process. Maybe it's just a refusal to face your own mortality.

Whatever the reasons, the results are the same. Proper estate planning requires that you be fully committed to putting--and keeping--your affairs in order. If you don't do it, it won't get done, and your family will suffer. Do it now.

Steve LeFever is the founder and chairman of Profit Mastery, a Seattle-based eLearning company that has trained more than half a million people on how to measure and manage financial information to consistently increase business profits. Their programs have been taught around the globe and are now available online as an on-demand video program that can be accessed 24/7/365. Learn more about this educational course at or contact him at 800-488-3520 x14 or

Published: October 1st, 2012

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