Category: Company Wealth

One Big Beautiful Bill

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Executive Benefits, Funding your Buy and Sell, Selling Your Business, Strategies of growing business, Tax Efficient, Tax Free Income

By Thomas J. Perrone, CLU, CIC

This video will give you a good idea of the “One Big Beautiful Bill”, and the strategies that can be employed for the long-term planning

The Trump Administration made life much easier in preserving legacy  for everyone.

If you wish to discuss any of this with me, please use my calendar link

Overview of the BBB and Planning Options and Strategies!

For Advisors and For Business Owners to Utilize. 

Tom covers some of the major areas of the bill, emphasizing income tax reduction and estate exclusion and estate shifting.  He urges estate owners to do planning now  and avoid delaying because although the BBB is now law, it can be changed by congress in the future.  Use it while you have it!

 

https://youtu.be/OgkPRr3JrDE?si=ajHUjvb5fi_hf9xZ

 

For overview of the BBB, click for a download

https://www.allclients.com/Form3.aspx?Key=78B769D475F542B7E20799CD205B9205

tperrone@necgginc.com

Case Study: Rapid Sales Growth and Ownership

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, Funding your Buy and Sell, Key People_Or Group, Strategies of growing business, Valuation, Working On Your Business

Case Example Using Term Insurance

By Thomas J. Perrone, CLU, CIC

This was a situation where the company needed protection but wasn’t ready to purchase permanent insurance, even though the situation called for it.  However, the term insurance gave them what they wanted at the time and gave them the needed protection. 

Scenario: 

 A thriving business, comprising three partners—a relationship builder, an idea generator, and a product engineer—experienced remarkable sales growth within a few years. However, a potential challenge arose regarding ownership transfer upon a partner’s death, as all partners shared familial ties. 


To mitigate this concern, a comprehensive stock redemption program was devised and funded through a term insurance policy with a premium exceeding $60,000. This strategic approach enabled the business to navigate ownership transfer complexities and ensure the continuity of its operations.

Through the years, parts of the term insurance has been converted, and the company is paying about $125,000 in insurance premium to fund their liabilities and commitment.  

The case was developed through a relationship i had with one of the owners, through an introduction.  

Lesson:  

Even though this was a start up and a young company, if I has assumed it did not have the cash flow, I would have lost out on all the great potential.  Don’t assume anything, but let your client tell you what they want and why. 

THE WHY: 

There was a past history of the one of the current partners where their family member was part of a company where the partner died.  No planning was done, so the deceased partners family became the new partners.  This was not pretty, and the business ended up in chaos.  Obviously, a motivating factor for the current owner to have a good Buy and Sell Agreement where it was funded 

If you are an advisor who is working with business owners or wants to develop a business market segment in your practice, we should talk. We offer great opportunities working with our organization and deep backup.  

Thomas J. Perrone, CLU, CIC

tperrone@necgginc.com

WHY A BUY AND SELL AGREEMENT FOR AN S CORPORATION IS NECESSARY! 

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Key People_Or Group, Selling Your Business

By Thomas J. Perrone, CLU, CIC 

A Buy and Sell Agreement for an S Corporation needs special designs.  

Key Point on Redemption of S Corporation 

  • Special tax needs 
  • Financial security 
  • Triggers that transfer the S corporation 
  • Conflicts 

Also, a proper buy and sell agreement can do the following:  

  • Avoid a fire sale 
  • Create stability for employees and creditor/vendors 
  • Avoid termination of the S corporation status 
  • Avoid costly litigation 
  • Create a market 

This video explains why a proper BSA is needed. It covers many areas when the company has selected S corporation status.  

Summary 

A properly designed buy and sell agreement (BSA) is essential for S Corporations due to unique tax concerns. It is important for financial security. Triggering events can transfer ownership and cause potential conflicts. Such an agreement helps prevent fire sales. It ensures stability for employees and creditors. It also protects S Corporation status. Additionally, it avoids costly legal disputes and creates a market for shares. The document highlights the importance of addressing these areas to keep smooth business operations. 

Buy and Sell Agreement Tutorial

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Funding your Buy and Sell, Income from your business, Key People_Or Group, Passive Ownership, retirement, Selling Your Business, Valuation, Value drivers

By: Thomas J. Perrone, CLU,CIC

and Sell arrangements that have emerged since the Connelly case.

The tutorial delves into the rationale behind the utilization of these arrangements and elucidates their advantages.

Furthermore, a comparative analysis of the funding costs associated with different Buy and Sell Agreement structures is presented.

FREE BOOK “UNLOCKING YOUR BUSINESS DNA” FREE DOWNLOAD

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Strategies for Making Your Taxable Retirement Plan – Tax-Free

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning, Executive Benefits, Key People_Or Group, retirement, Tax Efficient, Tax Free Income

By Thomas J. Perrone, CLU, CIC 

Retirement plans such as 401(k), IRA, 403(b), Cash Balance, Profit Sharing, and other qualified plans are popular choices for securing one’s future. While these plans focus on accumulation and stock market returns, which can be quite exciting, there are significant drawbacks associated with them.

Although retirement plans offer the appeal of disciplined savings and the potential for growth over time, they also come with inherent risks that are often overlooked. These plans, designed to assist participants, can sometimes result in financial shortfalls or unforeseen tax liabilities. The unpredictability of market performance and regulatory constraints may cause participants to question the adequacy and reliability of such strategies. Addressing these concerns proactively is essential for ensuring a smoother retirement journey and providing stronger security for loved ones.

Life insurance can help mitigate these downsides. However, there are several critical discussions that are seldom addressed when dealing with qualified retirement plans:

  • Future taxation: 100% of the funds are taxed upon withdrawal.
  • Death, disability, or termination of the plan: These events can significantly affect the ultimate outcomes for the family. For instance, if the participant dies five years into the plan, the family may not receive the anticipated benefits.
  • Sufficiency: Will the plan provide 60-75% of your final earnings?
  • Contribution limits: Participants may struggle to contribute enough to create the principal needed to achieve the desired percentage, particularly highly compensated employees.

These issues can be addressed effectively by incorporating life insurance into the retirement strategy.

The accompanying video explores some of the most pressing questions regarding retirement plans.

Learn about the JFK ERA benefit plan used for high earners, a plan that will create tax-free benefits with very few restrictions. This is a plan every Business Owner should know about.

Get your FREE REPORT– CLICK THE LINK BELOW

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Thomas J. Perrone, CLU, CIC

tperrone@necgginc.com

A Business Owner Committed to Exceptional Service and Effective Communication! 

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, evaluations, Key People_Or Group, Working On Your Business

By Thomas J. Perrone, CLU, CIC

Romeo Belisle is committed to exceptional service and communication, defying the trend of declining client service and employee mentorship. With a background in the Navy, Romeo values quality above all. He discusses his unique approach to training employees and maintaining constant communication with clients. Romeo’s mission is to ensure quality in all his businesses, enriching both end users and those around him.

Dan-Kar
192c New Boston st
Woburn, MA 01801 Map

Dan-Kar Website

(508) 916-8645 w

romeo@dan-Kar.com

Romeo Belisle of Dan-Kar Corporation in Woburn, MA, is a notable business owner. You can learn more about him on LinkedIn: linkedin.com/in/romeo-belisle-ba364416a

Romeo’s work focuses on helping and serving others, with a vision for business growth that aims to improve life for everyone. Read his LinkedIn profile and you’ll agree. Today, we’ll discuss business, growth, culture, and expansion.

https://podcasts.apple.com/us/podcast/building-and-protecting-your-business-worth/id1539791693?i=1000704913159

Free Ebook; “Building and Protecting Your Business Worth”. Over fifty years of business planning!

CLICK

New England Consulting Group of Guilford, Inc.

tperrone@necgginc.com

An Insurance LLC

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Executive Benefits, Funding your Buy and Sell, Inside Sale, Passive Ownership, Strategies of growing business, Uncategorized

By Thomas J. Perrone, CLU, CIC

An Insurance LLC is a limited liability company (LLC) created to own and manage one or more life insurance policies to help meet the obligations under a buy-sell agreement. The Insurance LLC is a new business entity formed under local law, separate and apart from the business or businesses that are subject to the primary buy-sell obligations.  Since the Connelly ruling, Advisors are looking for ways to provide a funding arrangement for buy and sell agreements and the Insurance LLC is another way of providing for the buy and sell arrangements.  

GET YOUR FREE eBook, “Unlocking Your Business DNA”. My published book discussing 50+ years of strategies used to Protect, Create Wealth, Grow business, and Transition the business. Great strategies for advisor and business owner- yours free.

https://www.allclients.com/Form3.aspx?Key=4F3D16E276A4EC0C73BFDC182AA06C23

Connelly – Alternative 2024 

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Funding your Buy and Sell, Life Insurance Types, Selling Your Business, Valuation

Thomas J. Perrone, CLU, CIC

Connelly was a hard case to digest as most of us who have been around the planning world for an exceptionally long time. We took the consequences of funding a stock redemption agreement as very normal.  As normal as “cutting the end of the ham first.”  

We are now forced to rethink this situation after the ruling, care must be taken when arranging the Buy and Sell Agreement and funding of a company, to avoid the results we have seen in Connelly.   

Today I will bring you through a few options that advisors and business owners may consider when planning the transition of business interests.   

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tperrone@necgginc.com

Take the Planning Tools Out of the Shed- You’ll Need Them!  

Featured by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Executive Benefits, Funding your Buy and Sell, Income from your business, Inside Sale, Key People_Or Group, Life Insurance Types, Passive Ownership, retirement, Selling Your Business

Thomas J. Perrone, CLU, CIC

After the 2017 Jobs Act, many of us (estate and business planners), had to shift our planning topics to moderate estate, Medicaid and income tax planning.  

Many of the tools we used prior to the 2017Jobs Act were often used in the planning process, simply because more business owners were affected and exposed to the Federal and State Estate Tax System. Consequently, more sophisticated strategies were needed to shift value, freeze value, or shelter value from the estate.  

Once the Jobs Act came into play, the exemption amounts eliminated many small business owners from the problem of estate taxation.  

However, with part of the Jobs Act heading for Sunset, we may see more businesses becoming exposed to Federal and State estate taxation.  

Time to go to the shed if you want to play in this market.  

This video will help guide you to some of the areas of planning you will have to dust off and rekindle for use.  

Download your Free Business Guide which will help explain many of the topics discussed. Immediate download, CLICK HERE! 

Thomas J. Perrone, CLU, CIC

tperrone@necgginc.com

The Elephant in The Room!  

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Executive Benefits, Funding your Buy and Sell, Income from your business, Inside Sale, Passive Ownership

BY: Thomas J. Perrone, CLU,CIC

The elephant in the room is about the four major questions that need to be asked by a business owner and advisors for the business owner to avoid failure of the business. The four major questions are. 

  1. What happens to the business if you die become disabled or want to retire?  
  1. What happens to the business if you lose your key person or key group to competition, or they leave?  
  1. What happens to your business if you have a bad economy and cannot make cash flow to support the business? 
  1.  What happens if you burn out and want to leave the business?  

I cover these four areas in this video.  

The major question:   

How Will the Failure of the Business Affect Your Family!  

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