Planning for business to ‘out-survive’ you

WARNINGS from IN8 Business Advisory service about estate planning for business leaders come from experience as much as concern for clients.

While IN8 Business Advisory prefers to focus on developing both business and family financial freedom – by finding what it calls the ‘freedom gap’ that exists in most businesses – lately it has seen examples of all that good work unravelling through unexpected health circumstances and even, unfortunately, the unexpected death of a business leader. 

IN8 general manager Colleen Tarrant said those sad situations drove her team to create a free publication, Estate Planning – What You Need To Know, and place more emphasis on business leaders being up-to-date in their estate planning.

Ms Tarrant said once business leaders considered the ramifications of such oversight, and were better informed, they usually reacted fast. The thought that the business set up to provide for family could collapse in the event of an untimely death was a powerful motivator, she said.

“Close your eyes for a quiet moment, and think about what might have happened if you’d passed last week …” Ms Tarrant said.

“Would your debts and the children’s education be covered by your insurance?  Would your superannuation funds go to the right people? 

“Would the distribution of your assets be tax effective for your heirs?  Would your children be cared for financially if your surviving spouse remarried?  Would your business survive without your input?”

The reality was, most business leaders has not completed such a vital task.

“Very rarely do I talk with new clients who have up to date and documented estate planning; even some lawyers I’ve talked to don’t have a current will,” Ms Tarrant said. “People are busy, they are short of cash, they don’t want to think about it, they have one somewhere but they’re not sure where, they haven’t made one since years before their recent divorce, the list goes on.”

Another problem was that the traditional will – known as the ‘I love you’ will, which leaves all assets to a spouse and, in the event that spouse dies, to children or extended family – was also likely to be de-railed by fast-moving circumstances.

“It’s a relatively simple document for future planning; it’s just that in our modern lifestyles, our lives are not always that clear cut,” Ms Tarrants said. “Situations change, relationships break down, marriages are made, children are born, businesses are established, taxes alter, debts are incurred, and blended families affect family dynamics. 

“Your will is not a static document; it needs to change, as your life goes through major milestones.

“The best estate planning strategies occur where specialist business advisors and estate planning lawyers together provide clients with a specifically tailored solution,” Ms Tarrant said.

“Planning today could save a lot of stress in the future, safeguard your family’s assets, and give you peace of mind.”

www.in8businessadvisory.com.au

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