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/ Succession & Asset Protection
Running a business is hard work. The daily work needed to make a business successful leaves little or no time to plan for the ownership and management changes that will inevitably occur. None of us likes to think about or discuss our own mortality, but the process of succession planning, like good financial or estate planning, is all about what will happen after we are retired or gone for good. The longer owners wait to design and implement a succession plan, the greater the risk that the plan will not meet their goals. The risks also increase that the business will fail along the health of the owner. When a business owner does not implement a succession plan before he or she is disabled or dies, the value of the business often drops rapidly. In fact, it is not uncommon that both the business and the business owner die on the same day. This means that the owner’s intended beneficiaries will not receive the full value of the business.
In order to put a plan in place for the succession of your business, you may choose to use one of several methods such as a buy-sell agreement, an offshore trust or foundation, a private annuity, a family limited partnership, management buy-out or a direct gift or sale. This is a complex area and a major decision involving, for many, their most valuable asset. The use of professional advisers is essential as they can provide knowledge and expertise in areas where you may have little experience. When seeking out professional help, choose carefully. Find someone with whom you feel you can establish a good working relationship.
Thousands of entrepreneurs each year lose their homes, their savings, and their spouse or partner’s assets to boot. Such misfortune is as avoidable as it is traumatic. All too often, by the time they see us it is too late to avoid a personal bankruptcy.
A substantial number of clients call upon us to help protect their assets – from daily operational risks in their course of their trade, from frivolous lawsuits and excessive inheritance tax.
The key to asset protection lies in the separation of liabilities: personal liability, different business ventures, real estate, pension or ‘rainy-day-funds’ should all be separated. The simplest form of asset protection is a limited liability company. It can be used to separate your private assets from the risks associated with your business venture.
Depending on your needs, additional layers of protection can be added to protect your interests. For example, you can protect your company from the risks of a former sole-proprietorship or general partnership by setting up a Trust. Your estate can be protected from claims using a Foundation, intellectual property can be managed by an offshore IP holding company and so on.
We advise you to all aspects related to inheritancer and business succession. If you own a family business, retirement is more than a matter of deciding when to go. Business succession planning ensures a smooth transition and avoids ownership and control issues. We address inheritance issues for Muslims and non-Muslim nationals ensuring your clients know all facts and can make optimal decisions. We can prepare you a will which declares your intentions as to what should happen to the distribution of your assets, upon death.