Yes, that can happen.
Everything becomes more complicated as your estate grows. The more assets you have, the more tax implications and hands are in the pot.
There are also different levels of planning you can buy, depending on how much you are willing to spend. For example, you could set up an offshore trust in Nevis. You’d have to pay $25,000 just to get your foot in the door.
This is one of the reasons we recommend starting the Estate Planning process as soon as you have assets worth preserving, even if it isn’t much. This will simplify things as you grow because you have already established a baseline and organized your current assets.
Imagine a scenario where your partner passes away. His portion of the business is inherited by his spouse. Now you are business partners with the spouse.
How does that make you feel?
If you have even the least amount of hesitation or concern, then you may want to plan for that contingency. There are tools designed to help protect you and the business from this type of scenario. For example, a “buy-sell agreement” or “business succession planning.”
An Estate Plan is a cheap insurance policy against this type of worst case scenario.
It depends on what you’re trying to do:
PriceWaterhouseCoopers did a study of 1,600 family-run businesses and found the following:
If you want to make sure your business survives and retains its value, then succession planning is something you should take a serious look at.
Have you ever wondered what would happen to your business if you weren’t around? If you haven’t, then let me shed some light on a few scenarios:
First, there is the concept of a “key man.” If you are gone and haven’t formulated a plan, your business will struggle to operate because everything runs through your knowledge and relationships. Vendors, customers, service providers, intellectual property or patents - all of these come back to you.
How do you ensure that the business continues to thrive and provide income to your family when you are gone?
This is one of the reasons why Estate Planning is even more important for business owners than regular folks. If you are a business owner, you need to take this seriously and plan for emergencies so that your family is taken care of if you aren’t around to keep things running.