C3 FINANCIAL PARTNERS

Choosing a successor outside the family can open up unique opportunities for business continuity and growth. Outside buyers, including current employees, investors, or other entrepreneurs, may bring new skills and perspectives that can take the business to the next level. However, navigating this route requires forward-thinking planning and a proactive approach to succession arrangements. Here are a few strategies for business owners considering non-family succession: ?? Start Planning Early ?? Consider an Advisory Board ?? Prioritize Communication with Heirs #BusinessSuccession #businessplanning

Earlier this week, we spoke about the importance of a buy-sell agreement when talking about business sucession. Earlier this year, the U.S. Supreme Court issued an opinion in the case of Connelly v. The United States that has a big impact on how buy-sells are structured and funded. To learn more, you can read our piece on the decision at the link below. https://lnkd.in/eDMpdSqB

When planning for succession without a family transfer, establishing a buy-sell agreement can be essential. A buy-sell agreement is a legally binding contract that determines what happens to a business owner's share in the business upon specific events such as retirement, disability, death, or sale. In the context of third-party succession, this agreement can facilitate a smooth transition and protect the interests of all parties involved. #businesssuccession #businessplanning

Choosing not to pass the business on to family members doesn’t mean business owners want to exclude their family from their legacy. Many business owners, especially those with multiple children, aim for an equitable distribution of assets among heirs. However, when the family business represents a significant portion of an estate, equalizing the estate can be a complex challenge. While it might seem simple, estate equalization requires careful planning, often involving a life insurance policy purchased for the non-business heirs. This can provide liquidity and help offset the business’s high value within the estate, helping ensure heirs have similar financial benefits without needing to share in business operations. If you or your client is grappling with how to provide equally for all their heirs, call us. At C3 Financial Partners, we work with clients and their advisors to help provide confidence that all the kids will be taken care of, avoiding awkward Thanksgiving dinners.

The recent battle in a Nevada Probate Court over the future of Rupert Murdoch's empire is a perfect example of both the emotional and financial factors that come to play when talking about succession of a family-owned business. For many business owners, their enterprise represents years or even decades of hard work, financial risk, and countless personal sacrifices. Deciding what will happen to that business is naturally going to be a fraught process and may lead the owner to decide not all the kids, or maybe any of them, should be involved in the business's future. Some, or all, of the next generation may lack the skills or interest necessary to successfully manage the business. Or perhaps the business would be better served with the assistance of outsiders who have the skills to grow the business. For many business owners, the business is their retirement. Monetizing the business to fund their retirement may be easier when selling to an outsider or key employee rather than passing the business on to kids or grandkids. At C3 Financial Partners, we collaborate with clients and their advisors to help them gain the clarity around their business and their planning to allow them the space to make the best decision for everyone involved. #businessplanning #businesssuccession

A recent survey by Edward Jones found that among financial advisors who work with business owners, 72% reported their clients do not plan to leave their businesses to family members. This trend reflects a shift toward strategic planning that focuses on business continuity, fairness among heirs, and personal preferences. Follow along all month long as we explore the reasons business owners may not want their families to inherit the business as well as the strategies for fair distribution of wealth when not all the kids will be getting a share of the business. #successionplanning #businesssuccession

Know what's really scary? Seeing your hard earned legacy go poof because of poor "heir quality." In our latest blog, available at the link below, we explain why you need to trust a trust and not your beneficiaries. https://lnkd.in/e3wK-PUY

Last week, we spoke about the power of life insurance in planning to protect against poor heir quality. For more on using life insurance in estate planning, read our recent post on the subject (available at the link below). https://lnkd.in/gUNAyVfu #lifeinsurance #estateplanning

When using a trust to protect against poor "heir quality," life insurance can play a pivotal role. Instead of naming an individual as the direct beneficiary of your policy, you can name the trust itself as the beneficiary. Upon your passing, the life insurance proceeds will flow into the trust, where the trustee can manage and distribute the funds according to your guidelines. This approach will help provide liquity to cover expenses, such as estate taxes, and can help ensure your assets remain intact for future generations. #lifeinsurance #estateplanning #heirquality

Here’s are a few reasons a trust is often a smarter choice than a beneficiary designation: ? Control and Customization: A trust gives you the power to outline specific conditions for distributing funds. ? Protection from Creditors: If your heir has existing debt, a properly structured trust can protect the assets from creditors. ? Professional Management: When you establish a trust, you can appoint a trustee to oversee the assets. ? Safeguarding Against Addiction or Poor Choices: If you're worried that an irresponsible heir might misuse their inheritance due to addiction, a trust can protect them from themselves. ? Multi-Generational Planning: Trusts allow for long-term estate planning. You can create a plan that benefits not only your immediate heirs but also future generations. #estateplanning #heirquality