Your business succession plan must answer three key questions

Succession planning is very important for a family owned business. Before you sit down with your tax and legal advisors to draw up a succession plan, you should think through three key issues: who do you want to succeed you, when do you want the transition to take place, and how do you want to structure the transition?

* WHO? The question of who will succeed you in the business can be the toughest of all, largely because there is so much emotion involved. Most owners want to pass the business on to the family. But are your children willing to take on the business, and if so, are they capable of running it? Will it cause a family squabble if one or two children want to run the business, but others are not interested? Resolving these issues may take a lot of honest, open discussion with family members to discover their true feelings. If there is not an obvious family successor, other alternatives include selling the business to an outsider, promoting an existing employee to head the business while you retain ownership, or even selling the business to the employees.

* WHEN? When you make the transition depends on a number of factors, such as your age, health, retirement goals, and the readiness of a successor. Consider whether you want to maintain some involvement with the business or make a clean break. Remember, though, you should always have a contingency succession plan in case of sudden death or disability.

* HOW? How you structure the transition depends partly on the answers to the earlier questions and partly on financial considerations. Think through issues such as whether you need retirement income from the business or whether you primarily want to minimize estate taxes. Knowing your goals for the transition will make it much easier to tailor a succession plan that fits your specific situation.

For guidance in your business succession planning, give us a call at 305-500-9361

Should I invest in my Traditional IRA, this year of so much uncertainty ?

My answer is YES,YES, YES, the best provision of a Traditional IRA which is the tax-deductibility of contributions is a good reason to consider making your investment this year. Today’s shaky state of our economy and the instability of the financial markets is a consideration, your retirement plan should be based on long-term investing goals and must continue.
While in the Traditional IRA, transactions in the account, including interest, dividends, and capital gains, are not subject to tax, withdrawals from the account, are subject to federal income tax and 10% early retirement penalty, some exceptions apply.

Please remember that you have until April 15,2010 to make your IRA Contributions for the tax year ended December 31, 2009.
Perhaps in times of economic uncertainty, the Traditional IRA funds might be placed in a more conservative investment vehicle not so reliant on the volatility of the stock markets. Be sure to consult a trusted financial advisor for information based on your individual needs.

José F. Padró, CPA.
padrocpa@padrocpa.com
www.padrocpa.com
PADRO and Company, P.A.


The information at this Site has been provided by José F. Padró , CPA. for general information purposes. It does not constitute legal, accounting, tax or other professional advice or services and is presented without any representation or warranty as to the accuracy or completeness of the information.