“I’m doing it for my family, to give them a better life” is the stock answer we all give when asked why we put ourselves through all the pain and heartache of owning and running a business.
And, in my experience as a business strategist and executive coach, some of us proudly produce the business plan we are working to – which supposedly will give our families that better life.
But what is this thing called a better life?
And, what plan do you have for you and your family to enjoy that better life?
The importance and benefits of having a Family Plan was explained by Fred Verney of Townends at a recent meeting of the Wealth Enhancement Forum which I chaired.
Over the past thirty years, Fred has designed and developed a very effective family plan process that has enabled vast numbers of family and private businesses to successfully build and pass on wealth tax efficiently to following generations.
Having a family plan is at the heart of building, preserving and transferring wealth among those people who are most important to you – and for whom you are taking all the risks.
Firstly ask yourself what are the objectives in respect of:
• The family
• Yourself
• The business
Are they integrated? If not, what needs to be done?
The following are the three key elements of the plan
A Plan to Live and a Plan to Die
With life expectancy rapidly increasing and retirement becoming and ever distant possibility, passing on the wealth and/or business upon death is only part of the issue. There needs to be a plan for passing on wealth and assets during your life time as well as on death.
Fairness and Equality
Everyone in the family has a view on these crucial criteria. Besides the generational differences there are differences between parents, brothers and sisters, wives and husbands, plus the numerous combinations. Having a draft family plan provides a starting point for the all important facilitated discussions between family members.
The Tools to Use
There are whole raft of tools besides the Will that can be incorporated in a Family Plan and the ones chosen will depend on the answers to the three previous topics.
While your business plan is important you should devote as much – if not more time – to the family plan to ensure that what you are doing is for the right reasons and will produce the right results.
