• Man counting out money.

It’s Not Your Money

More likely than not you expect the money you’ve earned to be your own, but unfortunately, missteps in your Ownership Conversion Plan can result in up to 75% of it going to the IRS. Failing to follow through on focal points of your Ownership Conversion Plan can mean losses for yourself, your family, and the charitable causes you might otherwise support.

This is a loss not only for yourself, but for your loved ones and community at large. By having an optimized Ownership Conversion Plan that considers your plans for your business, your estate, and your legacy, you can ensure that your money is yours alone.

We provide the following tips to our clients:

Know When to Maximize and When to Minimize Transaction Value. Determining who you are transitioning your business to allows you to take the necessary steps to minimize personal costs while maximizing personal gains. With an Ownership Conversion Plan that results in the sale of your business to family members and key employees it’s especially important to minimize transaction value to a justifiable amount, for tax purposes. This is when your charitable actions are especially beneficial, again improving not only your own position but that of the community as well. On the flipside, when selling to an outsider it’s important to maximize the value of the transaction for pricing purposes.

Mesh Your Plans. It can be difficult to consider how your personal plans align with those of your business, especially when considering familial assets and business leadership needs. In my book I highlight my personal experience with how important it is for the business to be left to an active family member, rather than a passive member uninvolved with the business. These are tough but necessary conversations, as is ensuring that nothing in your will, Estate Plan, or Legacy Plan contradicts what’s been established in your Ownership Conversion Plan. The designed destination of your OCP should provide the most ease for your family, minimizing payout time and avoiding unintentional family conflicts.

Your success as an entrepreneur is not something you want to lose because of poor planning.

It’s important to remember that the IRS already has a plan for your money, make sure your Ownership Conversion Plan provides yourself, your family, and your community with the money your hard work has earned.

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