Clark Wealth Management Group - ScotiaMcLeod Fredericton

We’re all familiar with the idiom, ‘an accident waiting to happen’.

There are currently several financial and family accidents waiting to happen in New Brunswick over the next few years. I’m not referring to anything happening in financial markets, although that may be source of some mishaps, I’m talking about the large number of soon-to-be-retiring business owners who haven’t made any plans for the sale or succession of their business.

Privately (often family) owned small to medium sized enterprises are the backbone of our economy and at the core of most of our communities. With the exception of national chains, nearly everyone else we do business with fits into this group.

These people run very successful construction companies, car dealerships, lumber mills, trucking companies, commercial real estate operations, engineering firms, IT companies and much more. Many however have not taken time to plan ahead for when they’re no longer there to run things. The costs of not planning in advance can be very high indeed.

For most business owners these are their primary estate and business transition goals: 1) Accumulate, preserve and pass on their wealth. 2) Minimize and defer taxes. 3) Avoid family conflicts and litigation. 4) Provide a way to fund the unavoidable tax liabilities when the time comes.

These are noble goals, but most people involved in the day to day operation of their business can’t take the time and don’t have the knowledge required to get things done correctly. These are complex issues. The right steps need to be taken in the right order to achieve the four basic goals mentioned earlier. In most cases, business owners will need to consult with financial, legal and accounting professionals who do this specialized work. That may mean engaging different professionals than those who they are currently working with.

The financial items that will be dealt with through this process include; maximizing capital gain exemptions, minimizing tax, business valuation, income splitting, wills and powers of attorney, estate freezes, and various trust structures including family trusts. The personal items that will be dealt with include; whether or not a family member is capable of and interested in continuing to operate the business, how to balance the estate if one of several children are inheriting the business, how to communicate the decisions to affected family, and more.

Waiting for a significant life event (e.g. death or serious illness) to deal with these important issues is the ‘accident waiting to happen’. Please get in touch with your financial team of experts today to get the planning started. If you don’t know where to start feel free to get in touch with me and I’ll connect you with some helpful resources.

Keir Clark, is a senior wealth advisor, with Clark Wealth Management Group and branch manager at ScotiaMcLeod in Fredericton, NB. He can be reached online at www.keirclark.ca or by telephone at 506-450-6465.

Information and opinions contained herein have been compiled from sources believed reliable but no representation or warranty, expressed or implied, is made as to the accuracy or completeness.