As this article is being written, the U.S. and the world is in the mist of unprecedented times. The pandemic crisis has closed the country in many respects. Fortunately, businesses within the LBM industry have rightly been deemed “essential” and for the most part have remained relatively unscathed. In fact, many of our clients have commented to us that they have had their best months from a revenue standpoint.
Although we are all experiencing a temporary ‘new normal’, something that hasn’t changed is the need for proper business succession and estate planning. The current circumstances have shined an even brighter light on the critical importance for business owners to get it done and get it done properly.
Two common themes we’ve been seeing within the LBM industry as well as across the board of the more than 200 various industry organizations we work with is:
- Almost every business owner has ‘something’ in place when it comes to business succession, estate planning, and life insurance
- Too many of those business owners don’t fully understand what actually is in place (although many incorrectly think they do). The fact that they’ve taken the initiative to implement planning is to be commended; however, not knowing exactly what’s in place can be and is often problematic. Specifically, the danger of paying more in taxes that could have been legally avoided with proper planning, not transitioning businesses in a seamless manner, and the greatest blow of all, losing the business and corresponding fallout among family
No business owner strives to end up with these results; however, too many do.
LBM business owners have choices—make the right ones!
Address current planning to confirm that it is established in a manner that best meets your overall objectives. Do not just assume that it does. Quality planning will provide peace of mind that your business, non-business assets and family are protected.
It is often difficult to focus on these topics, but they cannot be pushed aside. There are many items that can take a business owner out of the game and they must be focused on with the same diligence and resolve a business owner has in running their company.
Many business owners have every intention of addressing the topic, but many never do. Once you’re no longer here the business and family fallout will be left for others to deal with. Take time during the pandemic crisis to think about the big picture—what are your goals for your business and family?
Can you say to yourself that you are 100% certain that you have legal documents which accomplish your goals in the manner you want?
Can you say to yourself that the valuation of your company will absolutely satisfy the IRS in the event of an audit?
Can you say to yourself that your liquidity planning is sufficient and structured properly to avoid all taxation?
These are just a few of the big picture items that must be addressed correctly.
Lee Resnick and Terrance K. Resnick are partners in Resnick Associates, a nationally recognized business succession, estate planning and life insurance advisory and implementation firm with offices in Kansas City and Harrisburg, Penn. They work with many LBM-related co-ops and their individual business owner members across the U.S. Contact Lee at lee@resnickassoc.com or 913.681.5454. Contact Terry at terry@resnickassoc.com or 717.652.2929.
