Successful business owners are busy people and consequently might put important things directly unrelated to their businesses on the back burner. Such could be the case with estate planning. Ontario entrepreneurs may be put off by the complexities of working on their estate plans, especially if they intend to pass down the business to their heirs. However, an exit plan is likely just as important as a startup plan.
Entrepreneurs wishing to keep their businesses in the family should focus on who they will want running the operation once they are not around to call the shots themselves. Plans may include ideas on how to keep the business profitable and what could be put in place for a successful retirement of the first generation and for successful take over of the business by the next generation.
An Individual Pension Plan (IPP) might be something for business owners to consider.
IPPs are flexible and can be started at any age. The operative thought is better late than never. Basically, an IPP is a company-established plan whereby the company owner gets a set amount when he or she retires.
A freeze on an estate could be another idea. Such a move would provide the retired owners with preferred business shares which could provide cash flow when and if needed.
Ontario business owners do not have to be scared away from estate planning. Enlisting the help of an experienced estate lawyer is the best solution. An estate lawyer who has had plenty of experience with wills and estates law will ensure planning is on the right track. An estate lawyer will provide guidance and tips to entrepreneurs wishing to leave their business legacy to family members.
Source: theglobeandmail.com, "Well-to-do business owners face estate-planning hurdles", Paul Brent, Oct. 31, 2017