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Many business owners focus on their business and forget to seriously invest for their own retirement.
The Retirement myth of the Entrepreneur A majority of business owners believe their company will provide investment capital when sold, or if passed on to the next generation, a salary or dividend payments. For some, their personal financial stability is riding on the future success of the company.
Make hay while the sun shines Don’t be overly optimistic, that your company will succeed and/or create a good revenue forever. When a business represents the major value of an estate, planning becomes necessary. You may make hay while the sun shines, but be sure to stack a lot of it away for future use.
Many are not convinced that they need to plan their estate or the succession of their business. Despite the financial importance of their business, most business owners do not know what the tax liability would be if both spouses were to die. An estate plan can ensure that these taxes will be paid from one or a combination of the following sources:
We are all aging despite our business successes Consider taking the time to do some basic estate planning to determine who will take over the company, and where your retirement income will come from. Revise or complete both your will and power of attorney. Review your personal and/or corporate-owned life insurance, disability coverage, and key-person insurance.
In some cases, the payment of relatively small life insurance premiums can entirely solve the estate’s future capital gains tax problems, or generate capital to replace the tax that may be payable in your estate.
Life insurance can also eliminate company debt and help a succeeding son or daughter with new business capital. Finally, it can help fairly equalize the division of your estate among all of your heirs.
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