Examine your estate plan for potential problems




“Risk assessment should include estate plans,” by Matthew F. Erskine

When developing a risk management program for a family-owned business, it’s important to create two outlines. The first takes a more linear, traditional approach to business continuity planning; it plots out options for events that can be forecast, or reasonably predicted.

The second outline is the one that’s unique to each family business because it involves issues that are not linear in nature, and are often rooted in questions of ownership and control. To plot out this path, you need to brainstorm trends, and scenarios within each trend.

Often these trends link back to he family’s estate plan and what will happen when that plan is executed. Will the family wealth be broken up and disbursed, or maintained? Will the family keep the business or sell it? Has the estate plan effectively accounted for potential tax consequences., and how will those tax payments affect the business? Does the plan set out steps for succession that are in keeping with the business plan?

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