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Peaceful moments with a child, grandchild, or other family member may be the very best thing about taking vacation. Before you head out of town, tick off essential estate planning steps like updating your beneficiaries. Knowing you've planned for everything you own and everyone you love might make the time together even more fulfilling. Learn more »
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Taking a break this summer?
It may seem like a drag to discuss estate planning in these warm summer months, but see if you can fit in some essential steps. Among other benefits, you may feel a deeper sense of well being during family visits and vacations, if you know you have planned for everyone you love and everything you own.
My mental tick list
Here are the things I mentally tick through before any big out of town trips:
- Have I chosen a reliable trustee or executor?
- Does my trustee/executor have access to my key documents? (If they are in a safety deposit box or safe, for example, do they have a key or combination handy, just in case?)
- Do I have enough insurance coverage?
- Are the beneficiary designations on my life insurance, retirement plans and annuities, in synch with my estate plan? (For most people, they are not.)
- Is my living will and healthcare power of attorney up-to-date with the HIPAA Act?
- Has anything changed that my advisors need to know about before I go?
- Are there are provisions in our estate plan for care of our family pets, should anything happen to me?
Getting essentials squared away before you leave town
Have I convinced you to at least check into these things before you leave town? If so, we are here to help. And unless you're leaving town tomorrow, we can probably get essential work done before you go -- freeing you to take a restful, guilt free holiday. Get started using a convenient form here at our website »
Checklists and guides that may help you
Here are guides I've published that might help you:
All the best,
I recently consulted with a very successful Palo Alto business owner and was surprised to learn that he did not have an exit strategy for his Silicon Valley business. As a matter of fact, he told me that he had never really even thought about what would happen to his business if he died or became incapacitated. He assumed that his wife or children would continue to operate the business once he was gone.
What is an exit strategy?
Business succession planning is an essential element of estate planning. Business succession planning enables a business owner to implement an exit strategy for leaving the business either voluntarily (retirement or sale) or involuntarily (incapacity or death).
Without a relevant and up-to-date exit strategy, the departure of a business owner can have a devastating impact on the business – including bankruptcy or closure.
Six elements of a sound succession plan
For high net-worth clients who are business owners, there are six keys to planning a business succession exit strategy.
1. What are your financial goals?
In putting together an exit strategy, a business owner must determine what his financial goals are. This includes determining long term income needs and retirement goals. It’s also important to consider these goals in light of the costs of medical care in the event of a major illness.
2. When will you retire?
It’s important to establish a timeline for retirement. This gives the business owner ample time to groom a replacement, if necessary, and otherwise get her proverbial ducks in a row.
3. What is the current value of the business?
Knowing the value of the business is important because it directly impacts the business owner’s timeline for exiting the business. To determine the value of the business, a certified public accountant (CPA) or other financial expert will analyze the business’s profit and loss statement and balance sheet and compare it with those of similar businesses in the area.
4. Increasing the value of the business
If the value of the business is insufficient for the owner to achieve his financial goals or meet his income needs upon his exit, it’s essential that a plan for increasing the value of the business be formulated and implemented.
5. Selling the business
Consider the pros and cons of selling the business. The pros and cons will vary depending on whether the business will be sold to its employees, family members, or an outside third party. Moreover, the type of purchaser will impact employee compensation and benefits packages and tax planning strategies.
6. Planning for disaster, incapacity or death
In an ideal world, every exit would be voluntary. Unfortunately, there are instances when a business owner is forced to exit because of incapacity or death or when a business is destroyed in an earthquake, fire, or other disaster. Every business succession plan should include a contingency plan for these unexpected events. A good contingency plan often includes:
Intersection of business succession planning and estate planning
Having a relevant and up-to-date estate plan is essential. The business succession plan directly impacts the owner’s estate plan. How it impacts the estate plan, however, depends largely on whether the exit plan calls for the sale of the business versus a bequest (gift) of the business.
Getting legal help
It’s essential that a business owner formulate an estate plan that addresses every aspect of the business succession plan and that as each phase of the succession plan is achieved, the estate plan is updated accordingly. I am experienced in formulating personalized business exit plans and estate plans for business owners throughout the Palo Alto, Los Altos, and San Francisco Bay areas.
All the best,
Ensuring loved ones can access important information
Your estate plan needs to deal with all of the password-protected accounts you’ve established. If it doesn’t, your heirs might not know how to access important information that they’ll need to settle your estate. And if you keep your friends’ contact information on line, they might not be able to contact the people who care about you.
Do you bank online?
According to a recent study by HSBC Direct, 49% of the online population conducts most of its banking via the Internet. And many people have opted to “go paperless” for their routine bills – telephone bill, newspaper, utilities, etc. – or for their stock brokerage accounts and other financial data.
How would your heirs find out what your passwords are? Have you developed a plan for sharing them with the people who need to know them? Have you developed a plan to keep the list up-to-date?
If not, now's the time to begin!
All the best,