A successful business can create extraordinary opportunity for an owner and family. It can also concentrate wealth, responsibility, and risk in a single asset.
Most business owners have addressed at least some of the legal, financial, tax, insurance, and estate-planning issues surrounding their businesses. The harder question is whether those pieces will actually work together when circumstances change.
This assessment is designed to help identify questions that deserve closer examination before death, incapacity, an ownership transition, or another major event forces those questions to be answered under pressure.
A) Yes — I am confident this issue has been addressed and I understand how the current planning is intended to work.
B) Partially / Unsure — Some planning exists, but I am not certain how it would work, whether it remains current, or whether the relevant pieces are coordinated.
C) No — This issue has not been adequately addressed.
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I have considered not only who should receive economic value, but also whether family members should receive ownership, voting rights, management authority, income, or some combination of those interests.
I have considered whether an equal division of ownership would actually produce a fair and workable result for the family and the business.
They understand their intended roles, who would make decisions, and which advisers or other individuals would become involved.
I have considered household needs, debt, taxes, business distributions, insurance, buyout proceeds, and the timing of when funds would actually become available.
The answer is consistent with my estate plan, entity documents, ownership records, beneficiary arrangements, and any applicable buy-sell or transfer provisions.
I know whether transfers to family members, trusts, co-owners, employees, or third parties require consent, trigger purchase rights, or are otherwise restricted.
Where a purchase arrangement applies, I understand who may or must buy, who may or must sell, how the price would be determined, when payment would be due, and how the purchase would be funded. If no purchase arrangement applies, I am confident that this is intentional and consistent with my objectives.
I have considered whether the present entity structure, ownership percentages, classes of ownership, trusts, related entities, and economic and voting rights remain appropriate as the business has changed in value or complexity.
The person expected to act would have the legal authority necessary to vote the interest, exercise owner-level rights, and make decisions that require owner approval.
My family, co-owners, employees, advisers, and courts would not have to improvise a temporary solution to determine who has authority.
I understand who can vote, appoint or remove managers or directors, access banking, sign contracts, incur debt, make payroll, hire or terminate employees, and make other important decisions.
I know how co-owner rights, boards, managers, lenders, governing documents, or other agreements could affect a major ownership or control decision.
That analysis considers family support, business operating needs, debt, taxes, administration expenses, buyout obligations, and the interruption or loss of income.
If my ownership interest would need to be purchased, redeemed, or otherwise converted into liquidity, I know where the money would come from and whether it would be available when needed. If no such funding need is expected, I am confident that conclusion reflects my actual ownership and transition plan.
I understand who owns the coverage, who is insured, who receives the proceeds, why the policy exists, and whether the amount remains appropriate.
I understand which obligations could become due, remain personally enforceable, require lender consent, or otherwise affect my family or the business.
I am confident that the different components of my planning are intended to produce the same result rather than conflicting with one another.
I have considered not only death and incapacity, but also events such as disability, retirement, attempted transfer, divorce where relevant, deadlock, a co-owner's departure, or a sale of the business.
Where relevant, I understand whether loans, guarantees, leases, licenses, contracts, customer or vendor arrangements, or other commitments contain consent requirements, defaults, termination rights, or other consequences tied to a transition. Where no such restrictions apply, I am confident that conclusion has been considered rather than assumed.
My attorney, CPA, financial adviser, insurance professional, banker, and other relevant advisers are not independently creating solutions that depend upon conflicting assumptions about ownership, control, succession, liquidity, or family objectives.
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This self-assessment is educational information based on your responses, not a legal opinion or a determination that your planning is adequate. Completing it does not create an attorney-client relationship.
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