Succession Planning
Don’t Let the Tax Tail Wag The Dog
Many business owners when asked if they have done a succession plan answer “yes, my lawyer did that for me a few years ago”. What they often don’t realize is that the lawyer did an estate plan for them which is but one albeit very important component of a succession plan. Less than 3% of wealth transitions fail due to a poorly designed estate plan whereas 60% fail due to a trust and communication breakdown within the family.
Step 1 of the Equitas succession planning process consists of a discussion with the business owners and ideally their spouses as to their wants and needs going forward. Step 2 brings in other key stakeholders of the business to discuss what the succession plan is or ought to be – i.e. sale, finance or keep it in the family. If the plan is to keep it in the family, we help structure the process including business and family meetings. If the plan is to sell or finance the business, we provide the necessary advice and work alongside our client’s other advisors to achieve the desired result.
Once the client knows where it wants to go and has a plan to get there, the estate plan should be reviewed to ensure that it is properly aligned with the succession plan. In that way, the client avoids the “tax tail wagging the dog” which is a big reason why some brilliantly-crafted estate plans go awry
Many systems refer to taxes paid indirectly, such as taxes withheld by payers of income, as credits rather than prepayments. In such cases, the tax credit is invariably refundable. The most common forms of such amounts are payroll withholding of income tax or PAYE, withholding of tax at source on payments to nonresidents, and input credits for value added tax.term life insurance quotes
By term life insurance quotes on 2011 02 09
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