What is a Family Business Plan?
Most people have heard of Pre-nuptial Agreements (before getting married) and Post-Nuptial Agreements (after getting divorced), but very few people are familiar with the concept of a Nuptial Agreements (during the marriage). The pre-nuptial and post-nuptial agreements are almost exclusively created to provide for the distribution of marital property and the custody of the children in the event of a failed marriage.
The Family Business Plan© was specifically developed for spouses who have built a successful business or professional practice together and is based on the assumption that in the event of a divorce the spouses and their children (the “Family”) are best served by protecting and preserving the business or professional practice.
Every professional practice is also a business and for purposes of this document businesses and professional practices will be referred to herein as a “business.” I have carefully designed the Family Business Plan© to protect the interests of the family. This is accomplished by determining the optimum business structure for the family and by identifying and preparing for a variety of contingencies that can negatively impact their business or professional practice. The Family Business Plan consists of an Estate Plan, a Nuptial Agreement and a Business Succession Plan, and includes a detailed review and analysis of Asset Ownership, Business, Life Insurance, Liability Reduction, Lease and Contract Compliance and Controlled Asset Transfers to Children.
The Family Business Plan is Unique to Each Family
This is not an agreement that you can search on the Internet because these agreements are very private and each one involves very specific and unique circumstances. Because of this, each plan is unique and the plan for one couple will not be suitable for another.
This introduction is merely intended to provide a broad general understanding of the concept. Creating a powerful Plan requires a thorough audit of the business and in depth interviews of the spouses to determine their business goals and vision. A properly crafted Family Business Plan should protect the business and strengthen the marriage by reducing uncertainty, liability and stress.
Goals and Benefits of a Family Business Plan
A well-conceived Family Business Plan should determine the optimum family business structure and provide the following benefits:
1. Review the business plan to determine the optimum business structure to accomplish your business goals and dreams.
2. Identify sub-businesses that can generate additional streams of revenue and offer tax advantages (i.e. equipment leasing).
3. Identify all business and personal debts and liabilities and determine ways to restructure and accelerate debt reduction.
4. Review all business contracts and leases to identify potential liabilities and to determine opportunities for refunds and cost reduction and to avoid duplication of services.
5. Review all business expenses to determine opportunities for expense reduction.
6. Identify all personal guarantees to develop plan to reduce and eliminate.
7. Identify ownership of business assets and restructure as beneficial.
8. Identify all personal and business life insurance policies and determine most advantageous ownership of policies for tax purposes and etc.
9. Identify all commercial business Insurance policies to evaluate coverages and reduce expenses and duplication.
10. Review all corporate documents and filings and determine actions needed to have proper records and to re-establish corporate insulation from liability.
11. Provide for an orderly succession of the business/medical practices in the event of the death or disability of one of the Owners/Doctors.
12. Determine appropriate strategies to transfer assets and revenue to children tax fee.
This comprehensive and sophisticated undertaking prepares the business owners or medical professionals who are just coming into their maximum earning years to maximize their business success while assuring the continuity and control of their business. This Planning process should also enable you to increase your business’s efficiency and effectiveness and generate more revenue with less effort.
Do you have a family business but no agreement in place as to what happens to the business in the event of divorce or death? The attorneys at The Greenberg Law Firm can walk you through these steps to make sure your business and family are protected. Contact us today at 630-416-4747.