Personal and Business Protection Strategies: Are You Protecting the Things You Are Most Thankful For?

    Dec 14, 2020

    As we go into the Holiday Season, this is a good time of year to take inventory and count our blessings. While this has been a challenging year, there is still no shortage of things to be thankful for. Indeed, we may even appreciate the things that matter most in our lives a little bit more than we did at the beginning of this year.

    For many of us, our personal assessment has included a commitment to do some strategic planning for the future to better protect the ones that we love.

    If the wellbeing of you and your family ranks among those things that you are thankful for this year – have you given any thought to what you can do to better safeguard and secure that prosperity?

    Protecting What We Love Most – Personal and Business Protection Strategies

    It is natural to want to protect those we love and to provide for their welfare. Most of us spend the majority of our adult lives working to build a secure future for our children and our own retirement. Unfortunately, that future may not be as secure as we had hoped without some strategic planning to protect against both unforeseen and inevitable circumstances.

    If we have learned anything this year, it is that things can change in an instant and nothing should be taken for granted. The first stage of preparing for your future is to PROTECT what you have against the unforeseen circumstances that come with the “Dreaded D’s” – (otherwise known as Disability, Death, Divorce, and Disaster ).


    Facing the “Dreaded D’s” - Avoiding Preparation will not Avoid the Consequences

    Nobody enjoys facing the inevitability of Disability or Death in their lives, let alone the possibility of Divorce or other Disaster. It is human nature to avoid thinking about these things, so it is no surprise that people procrastinate preparing for them. Unfortunately, avoiding preparation for the Dreaded D’s will not avoid the consequences , and too many otherwise prosperous futures have been lost because of a failure to plan accordingly. If a substantial amount of your wealth is tied to a family business, the need to plan for unexpected transitions is even more vital to you and your family.

    Regardless of where you are at in your efforts to secure your future, and that of your family, here are some key things that you can do that will profoundly improve your preparation against the “Dreaded D’s” :

    1. Personal Estate Planning
      Disability and Death will always be tragic events, but they need not also be a Disaster for your family or your business. Do you have a personal estate plan? Do your professional advisors and your loved ones know what to do with your business or your other assets in the event of your untimely Disability or Death? At a minimum, you should have a will, a power of attorney, an advance directive for healthcare, and you should verify that the beneficiaries of your investment accounts, bank accounts, 401(k) accounts and life insurance policies are consistent with your current intentions.

      If you have an estate plan, have you updated it to take advantage of new tax laws, gifting strategies, lower valuation in currently held stock portfolios, or other beneficiary trust mechanisms? Doing this kind of planning now will not only PROTECT the wealth that you have created, but will also MAXIMIZE what is RETAINED by those you love. Small measures at this point in time may have huge consequences for the future. It makes good sense to review and update your estate plan with someone who is fully informed of your long-term goals and priorities and to update it from time to time and when circumstances change. Has your estate planning attorney talked with you about planning strategies to take advantage of current market conditions? Rose Law Firm’s estate planning services are keenly focused on managing market events to our clients’ greatest advantage and often go hand in hand with effective business planning. If you are in need of estate planning services, consider scheduling a free consultation to discuss your options.

    2. Life/Disability/Key Person Insurance
      Will your business or your family be able to continue functioning if you are unexpectedly removed from the picture?While there is no price that can replace the loss of a loved one, commercial insurance products can smooth out that inevitable transition when you are no longer able to fill your historical role in your business or in your family. If purposefully managed, insurance products are also a wonderful way to transfer wealth in a tax efficient manner.

      Even though Disability Insurance is commonplace, it is surprising how many successful business owners don’t protect their earning potential against unforeseen Disability. Unexpected Disability usually comes with both loss of income and unexpected healthcare costs as well. You might want to consider supplementing your Life Insurance Policy with a Disability Policy to round out your protection against unexpected transitions.

      Key Person Life and Disability Insurance can ease the burden of an unplanned transition or unexpected loss for a business in much the same way as it can for a family. It will not and cannot replace the loss, but if the proceeds of one of these policies can be used to smooth out the transition period of an unexpected Disability or Death, then the unexpected tragic event may not also become a Disaster for your business. Ask your business counsel how Key Person Life Insurance policies can be integrated into your business plan and ownership documents to provide for a smooth transition in the event you or one of your key employees is no longer able to continue working with your company.

    3. Business Continuity Planning
      Business succession, whether as an expected transition or an unexpected transition, is just as inevitable for your small business as Death is for you. But have you prepared a Will for your business? What is the Business Continuity Plan for your business in the event of your unanticipated absence? Just like planning for Disability or Death, how you prepare now for a business transition event in the future will have a profound impact on that transition – what you will REALIZE and what you and your family will RETAIN in the transition.

      Even if there are revenues in place for your business to continue in your absence, your employees will not know what to do without a Business Continuity Plan. An effective Business Continuity Plan goes beyond the checklists of supplies, contacts, equipment and data storage, and includes specifics on who is authorized to do what in the event of unexpected circumstances. It should be carefully tailored to the specifics of your business and your available human resources and should chart a clear path forward, complete with designated roles and responsibilities. If approached deliberately, the process of creating a Business Continuity Plan is a valuable exercise for your management team and becomes a useful management tool for your business. Businesses that have developed formal continuity plans are more resilient than those that have not, and are thus more valuable. Make sure that your business doesn’t fail because you have failed to plan for the continuation of your business if you become unexpectedly absent. Talk to your business counsel about what a tailor-made Business Continuity Plan should look like for your business.

      If you know that you have a business succession event coming up, don’t delay your planning to MAXIMIZE the value that you have built in your business. There are a number of different business exit strategies to MAXIMIZE the value in your business in a planned exit, depending upon whether you are planning for a sale, or a transition to the next generation of family or a key employee. One common element of all of these business exit strategies is that they are more effective when planned for ahead of time. What you or your family RETAIN from an eventual transition of your business to new ownership in the future has everything to do with what you plan for today. Talk to your business counsel about the most likely business ownership exit strategies for your ownership in your business and how to MAXIMIZE and most effectively RETAIN the value you have built in your business.

    While this list of personal and business protection strategies is not exhaustive, these are some simple ways to get started towards securing your future and that of your loved ones. Building wealth is not sufficient if one of the Dreaded D’s can rob you of the value that you have created for your retirement and your family’s future. Small but deliberate steps at this point can ensure that you PROTECT the value you have worked hard to build for yourself, your business and your family.
    Please let us know if we can help fortify your long-term security with one or more of the many strategies we have crafted to PROTECT our clients’ long-term interests.

    A note about Rose Law Firm, P.C. – Our mission is to provide simple solutions to your business’s complex legal problems. Our focus is to - PROTECT, MAXIMIZE, REALIZE, RETAIN™ - the value you have created in your business. Every transaction we undertake on your behalf is done from the perspective of your long-term goals and priorities. If your long-term planning does not include one or more of the elements discussed here, please reach out for a free initial 60-minute consultation.



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    Is the future of your business and family secure? What are your action plans to safeguard the things you are most thankful for? Share with us in the comments below.