Why is Business Succession Planning Relevant?

With three decades of estate planning experience, Edgar Whitmore has served in several leadership positions in financial institutions. Edgar Whitmore is currently a partner at Lenox Advisors, assisting and advising clients in matters related to estate planning, insurance, and business succession planning.

Estate planning refers to creating a plan in which the possessions of an individual or company are given a destination after the person passes away or faces difficulties. It can include life insurance, instructions for passing valuables (such as a will), and instructions for business transference when the owner is retired, injured, or dead.

Business succession planning is within estate planning, and it is specifically targeted for those who own a family business. Business succession is critical for a successful transition of a company to the next generation – and planning for a successor is a step that can be taken at any moment of the owner's life.

During the process of business succession planning, the owner must choose how the ownership will be transferred. Of course, it can be a gift, but they may decide to sell the business or part of it to use the money for themselves or other beneficiaries. In this case it may be best to create a buy-sell agreement ahead of time. Getting advice on business succession also helps owners to minimize estate taxes during the transference of the business. 

Important Considerations When Selecting a Guardian

As a partner at Lenox Advisors, Inc., Edgar Whitmore guides a firm that provides client-focused solutions ranging from corporate benefits to wealth management. Edgar Whitmore provides knowledgable advice when selecting a guardian to care for children, should the parents die unexpectedly. This is important because the alternative is one of the court naming the guardian, without any parental input.

When deciding on the guardian, the first step is to create a list of those who are responsible and share similar values. These can range from immediate and extended family members, to close friends and teachers. Beyond having the same moral or religious outlook, intangibles can be critical, from a sense of humor to patience during life’s adversities.

Age is also an important factor, as older guardians may not have the energy to keep up with young kids and may themselves pass on relatively soon. One option when it is not possible to keep the children together is to appoint separate guardians. This can be preferable when the children are not close in age or are from different marriages.

Make sure to document this officially. Be aware that the parents’ choice of guardian is not binding, as the court’s only interest is the wellbeing of the child. However, the court will generally defer to the parents’ wishes, except in cases where the selected guardian is deemed unfit.

Keep in mind that the trustee, or the person who manages the children’s assets, is not always the guardian who raises them. Setting in place a separate trustee can help avoid potential conflicts of interest down the road, between the guardians and the children.

Disability Income Insurance Is Important at Any Age

Longtime Southern California executive Edgar Whitmore serves as a partner at Lenox Advisors, Inc. Edgar Whitmore has extensive knowledge in disability income insurance.

A serious injury or illness poses a significant threat to the financial security of families. Chronic conditions such as cancer, musculoskeletal disorders, and mental health issues are the most common causes of worker disability.

While many workers are reluctant to acquire disability income policies when they are young and in perfect health, illnesses and accidents impact people of all ages. One benefit in securing a disability income insurance plan when workers are young and healthy is that the premiums are relatively inexpensive.

Another reason that many workers delay in securing disability income insurance is that it is included in their company’s group plan. Unfortunately, such plans typically cover only a portion, usually 60 percent, of workers’ salary. These plans typically are not portable and do not protect against inflation.

One proven strategy is to maximize the available group coverage and then purchase supplemental individual coverage to address the shortfall.