Category: Uncategorized

Where You Are – Where You Could Be!

by YOUR BUSINESS WORTH, posted in Company Wealth, Estate Costs, Estate Planning, evaluations, Income from your business, Inside Sale, Life Insurance, One Big Beautiful Bill, Passive Ownership, retirement, Uncategorized, Value drivers, Working On Your Business

Why an Annual Review Is the Most Overlooked Step in Business Owner Planning

By Thomas J. Perrone, CLU, CIC | Founder, New England Consulting Group of Guilford, Inc.

Ask most business owners how their planning is doing, and they’ll tell you it’s fine. They’ll say it with confidence, too — the same way most of us would say we feel healthy on any given day. But ask that question in the middle of a CT scan, and the confidence tends to disappear. The difference isn’t your health. It’s what you can’t see.

Business owner planning works the same way. The plans you built years ago may have looked airtight the day you signed them. But time passes, tax law changes, your business changes, and your family’s needs change — and none of that shows up on the surface. The documents still sit in the drawer looking just as official as they did the day you filed them. What they don’t tell you is whether they still fit.

We get the documents completed and executed, feel good about it, and then one morning realize it’s been five years — or more — since anyone looked at them again.

A Familiar Story

This pattern shows up constantly — with my clients, and with the professional colleagues I work alongside every day. The planning gets done. Everyone feels the relief of finally having “taken care of it.” Then life takes over, and the plan quietly ages in place while the world around it keeps moving.

The real risk isn’t skipping the planning altogether — most owners eventually get that part done. The risk is discovering, years later, that Washington has rewritten the rules, your business has grown or changed shape, your family situation is different, and no one ever flagged it. If any of those shifts would have changed your strategy, the only real question worth asking is: when would you have wanted to know?

Building the Fix Into the System

This is exactly the problem I built the GWT Planning System® to solve. GWT stands for Growth, Wealth, and Transition — the three areas every business owner’s planning needs to work together, not in isolation. But good structure alone isn’t enough. A plan that’s well designed on day one and never revisited is still a plan that goes stale.

So, from the very beginning, the GWT Planning System® was built with an automatic annual review woven directly into it — not an optional add-on, but part of how the system runs. Every year, that review happens. Sometimes it’s in person. Sometimes it’s a phone call. Sometimes it’s a Zoom conversation. The format isn’t the point. The consistency is.

That built-in review does three things for every client:

  • It catches tax and legal changes coming out of Washington before they quietly undermine a strategy that used to work.
  • It keeps the plan aligned with the business itself, which rarely looks the same from one year to the next — revenue, staffing, ownership, and value all shift.
  • It accounts for changes at home — a marriage, a health event, a child’s changing role in the business, a shift in retirement timing.

The Most Critical Part of Planning

Over more than fifty years of doing this work, I’ve come to see this as the most important part of what I do — not just putting the right plan in motion but making sure it stays right as everything around it keeps changing. A plan is not a document you finish once. a relationship you maintain.

If you can’t remember the last time your plan was reviewed against today’s tax law, today’s business, and today’s family circumstances, that’s worth changing before it becomes a costly surprise. The goal isn’t to redo the planning every year — it’s to know, every year, exactly where you stand and where you could be.

The goal isn’t to redo the planning every year — it’s to know, every year, exactly where you stand and where you could be.

If it’s been a while since your plan had a real second look, let’s put one on the calendar.

tperrone@necgginc.com

Questions? Call me.  My Calendar

Download Your Free GWT Report- Learn how the GWT Planning System® can be your pathway to solid up to date planning and help you with decisions for the future:  Click

Check this Article out:

Are you Building your Business by Design…or by luck?

The Insurance-Holding LLC: A Smarter Way to Fund Your Buy-Sell Agreement

by YOUR BUSINESS WORTH, posted in Buy and Sell Agreements, Estate Costs, Estate Planning, Funding your Buy and Sell, Key People_Or Group, Life Insurance, Life Insurance Types, Selling Your Business, Strategies of growing business, Uncategorized, Valuation, Working On Your Business

 

By Thomas J. Perrone, CLU, CIC

Every multi-owner business eventually asks the same uncomfortable question: what happens if one of us dies, becomes disabled, or wants out? A buy-sell agreement answers the “what” — it’s the legal contract that says the remaining owners (or the business) will buy out a departing owner’s interest. But a buy-sell agreement is only as good as its funding mechanism. Promises to pay are worthless if the cash isn’t there when it’s needed.

Life insurance is the most common way to fund a buy-sell agreement, because it delivers cash exactly when it’s needed most — at death. The harder question is *who should own the policies*. For businesses with more than two or three owners, a growing number of advisors are turning to a special-purpose LLC created solely to hold those policies. Here’s how it works, and why it might be the cleanest solution on the table.

The Problem With the Traditional Options

There are two classic ways to structure buy-sell funding:

Cross-purchase agreements** have each owner personally buy a policy on every other owner. This works fine with two owners (two policies), but the math explodes quickly. Four owners need twelve policies. Six owners need thirty. Every time an owner joins or leaves, policies have to be rewritten. It’s an administrative nightmare, and it often means owners of different ages and health statuses paying wildly different premiums for equal buyout rights.

Entity-purchase (redemption) agreements** solve the multiple-policy problem — the company itself owns one policy per owner — but they create a different issue: when the company redeems a deceased owner’s shares, the surviving owners don’t get a step-up in the cost basis of their own interests. That can mean a much bigger capital gains tax bill down the road when they eventually sell

The LLC Solution

An insurance-holding LLC splits the difference. The owners form a separate LLC — sometimes called a “special-purpose entity” or “insurance LLC” — whose only job is to own and administer life insurance policies on each business owner. The LLC is typically structured as a partnership for tax purposes, with each business owner holding a membership interest proportional to their stake in the operating company.

Here’s the flow:

– The LLC purchases one policy on each owner’s life (not one per pairing, so the policy count stays low no matter how many owners there are).

– Each owner (or the operating business) contributes cash to the LLC to cover premiums.

– When an owner dies, the LLC receives the death benefit tax-free.

– The LLC uses those proceeds to purchase the deceased owner’s interest in the operating business, distributing it to the surviving members according to the buy-sell terms.

Because the LLC — not the individual owners — is treated as the policy owner and beneficiary, and because it’s taxed as a partnership, the surviving owners generally receive a basis step-up in their LLC interests similar to what a cross-purchase arrangement provides, while avoiding the multiple-policy headache of a true cross-purchase.

Why Owners Like It

–Fewer policies, less administration. One policy per owner, held in a single entity, instead of a tangle of cross-owned contracts.

– Basis step-up preserved. Surviving owners’ tax basis generally increases, which can meaningfully reduce future capital gains taxes.

– Avoids the transfer-for-value trap. Because all owners are members of the same LLC from the outset, properly structured transfers among them typically fall within IRS exceptions that keep the death benefit income-tax-free.

– Built-in flexibility. New owners can be added as LLC members without rewriting a web of cross-purchase contracts.

– Creditor separation. Holding policies in a distinct entity can offer a layer of separation from the operating company’s business risks.

What to Watch Out For

This structure isn’t a free lunch. It adds a second legal entity to maintain — its own operating agreement, its own tax filings, its own bank account for premium payments. The IRS has scrutinized partnership-owned life insurance arrangements in the past, so the LLC operating agreement needs to be drafted carefully, with real economic substance and clear treatment of premium contributions as capital contributions rather than disguised gifts. It also requires everyone to stay disciplined about funding premiums on time, since a lapsed policy defeats the entire purpose of the plan.

Is It Right for Your Business?

The insurance-holding LLC tends to make the most sense once you have three or more owners, where cross-purchase becomes unwieldy but the tax advantages over a straight entity redemption still matter. For two-owner businesses, a simple cross-purchase or entity-purchase plan may be all you need.

As with any buy-sell funding decision, this isn’t something to set up from a blog post. Work with a business attorney and a tax advisor who can model the specific numbers for your ownership structure, confirm the entity is respected for tax purposes, and make sure the policies, the operating agreement, and the buy-sell agreement itself are all pulling in the same direction. Get it right once, and it’s one less thing your partners have to worry about when the unexpected happens.

This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Consult a qualified attorney and tax professional before implementing any buy-sell funding strategy.

 

Discussion: :My Calendar

Website: www.bpbpgrp.com/tom

203.530.6615

tperrone@necgginc.com

Check out this : Cheapest Way To Fund Your Buy and Sell Agreement

FREE DOWNLOAD CLICK HERE: THE BSA GUIDE

 

What to Do When Your Business Partner Wants Out (50/50)

by YOUR BUSINESS WORTH, posted in Uncategorized

By Thomas J. Perrone, CLU,CIC

You and your partner own a business fifty-fifty. You’ve been in it together for years. It’s going well. And then one day he sits you down and says, “I’m done. I want out.”

Now what?

You can’t fire him — he owns half. You can’t ignore him — he’s still a decision-maker. And if the two of you disagree about what the company is worth, you’re deadlocked. Nothing gets done. Clients feel it. Employees feel it. The business starts bleeding.

Without a plan for this moment, here’s what usually happens next: a long, expensive fight. A court deciding your company’s future. Or a fire sale to a stranger who doesn’t care what you built. None of those outcomes are good — and every single one of them is avoidable.

 Why 50/50 Partnerships Deadlock So Easily

If you’re in a fifty-fifty partnership, or thinking about forming one, it’s worth understanding why this structure is so dangerous — because it sounds so fair.

Fifty-fifty. Equal partners. Equal say. What could be wrong with that?

Here’s the problem: a fifty-fifty split is a partnership with no tiebreaker. On any big decision, you have exactly two votes — one for, one against. When they cancel out, nothing moves.

Day-to-day, that works fine. You split the work, the profit, the decisions. But the moment a partner wants out, that equal split becomes a weapon. He’s not just a co-owner anymore — he’s a veto.

And here’s the uncomfortable truth: most buy-sell and partnership agreements don’t handle this well. They name a price. They name terms. But they never answer the question that actually breaks deals — what happens when one of you wants to leave and you can’t agree on the number?

Step 1: Valuing the Departing Partner’s Share

The first thing that goes wrong is the valuation.

Say the business does $4 million in revenue and generates about $400,000 a year in profit. Your partner says, “I’m out. I want my fair share.” Fair share of what? He’s not asking for $400,000 — he’s asking for the value of his half of the *company*. And that number depends entirely on how you value it.

Your accountant might say the business is worth one times earnings — $400,000. Your partner brings in his own appraiser, who says it’s worth five times earnings — $2 million. Because if he’s selling, he wants the highest number. If you’re buying, you want the lowest. Neither of you is wrong. You’re just on opposite sides of the same coin.

Now you’ve got two appraisals a million-plus dollars apart, and an agreement that just says “fair market value.” But fair market value is a phrase that starts lawsuits, not a number that settles them.

This is the first reason deadlocks happen — not because the business isn’t valuable, but because nobody locked in *how* it would be valued before the exit. That’s not a math problem. That’s a planning problem. And it’s fixable.

Step 2: The Money Problem

Say you get past the valuation. You and your partner agree the business is worth $4 million. His half is $2 million. Great. Now the real question: where does two million dollars come from?

“I want out” and “here’s your money” are two very different sentences. This is where most buy-sells actually fall apart — not in the courtroom, but in the bank.

Pay him over time?Two million dollars over ten years is over $200,000 a year — out of a business generating $400,000. That’s half your profit, gone, for a decade. That’s not a buyout. That’s a slow bleed.

**Borrow it?** The bank will lend, but now the business is collateral, you’re on personal guarantees, and you’re paying interest on top. On $2 million financed over ten years, that’s hundreds of thousands of dollars in interest — money that leaves your company for good.

**Fund it in advance with life insurance.** A policy on your partner’s life, owned correctly, so the money arrives when you need it — a structured payout that doesn’t starve the business. This is the funding question almost nobody covers, and it’s the difference between a clean exit and a collapse.

So now we get to the tool that actually solves this: the shotgun clause.

Some call it a “buy-sell” clause or a “put-call” arrangement, but the shotgun is what breaks a deadlock fast. Here’s how it works: either partner can name a price for the whole business — say, $4 million. The other partner then has a choice. Buy the departing partner’s half at that price, or sell their own half at that same price.

Watch what that does. It’s elegant. If your partner says, “I’ll sell my half for $2 million,” you decide — buy at $2 million, or sell your half for $2 million. Your partner has to be honest about the number, because if he names a price too low, you might just buy his half at that bargain. If he names it too high, he might end up buying yours at that premium.

The shotgun makes both sides name a fair number, because neither of you knows which side of the deal you’ll end up on. It’s the closest thing to self-enforcing fairness in a business partnership.

A word of caution, though: the shotgun isn’t for every situation. It works best when both partners actually have the ability to buy — meaning the money’s available. And it needs to be drafted by someone who understands the tax consequences, because those consequences can follow your family for a generation.

But for a fifty-fifty deadlock, where neither side will budge and neither side will blink, the shotgun clause is the cleanest exit there is.

 The Mistake That Turns a Deadlock Into a Lawsuit

Here’s the mistake I see owners make over and over — the one that turns a fixable deadlock into a years-long lawsuit.

Most owners don’t put a buy-sell or shotgun clause in place until a partner actually wants out. By then, it’s too late.

Here’s what happens: a partner says “I want out.” There’s no clause. So now you’re negotiating a price between two people who are already in a fight. You don’t agree on the number. You don’t trust each other. And every day that passes, the relationship gets worse and the business bleeds more.

By the time someone suggests a shotgun clause, it’s already adversarial — and clauses drafted in the middle of a conflict are expensive and rarely end well.

The time to put the shotgun in place is the same day you sign the partnership agreement, when you’re both calm, fair-minded, and thinking clearly. That’s when you lock in the mechanism, so that when the exit happens — and it will happen — the tool is already there, and the only thing left to figure out is the number.

Your 3-Step Action Plan

Here’s what to do this week:

1. **Find your deadlock clause.** Pull out your partnership or buy-sell agreement. No shotgun or buy-sell mechanism? That’s red flag No. 1 — and it’s fixable today.

2. **Lock in a valuation formula.** Not “fair market value at the time.” A specific formula — a multiple of earnings you both agree on and update yearly.

3. **Have the conversation.** It’s awkward to talk about the day one of you leaves. But the deadlock, the lawsuit, and the fire sale are far more awkward.

Picture the owner who has to sell because his partnership broke down with no plan in place. That’s a fire sale waiting to happen. Don’t let that be your business.

Plan the exit before the exit plans you.

Download your free report: The Buy and Sell Agreement Checkoff Guide

Learn about our planning GWT Planning System® AND how it can help you design a solid Buy and Sell Agreement :  GWT Planning System®  

Want a discussion? For a free Consultation:  Tom’s Calendar 

Here is another article related to this one:

Blog Article: 

Seven Things Buyers May Pay More for When Purchasing a Business

You Built the Business. Now Let’s Make Sure It Pays You Back.

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning, Income from your business, retirement, Selling Your Business, Uncategorized, Valuation, Value drivers, Working On Your Business

By: Thomas J. Perrone, CLU,CIC -New England Consulting Group of Guilford, Inc.

A planning system that helps business owners build value in their business,  stop overpaying taxes, stop losing wealth, and creates  business value and aa path so they can walk away from their business with their wealth, and on their own terms.

The Problem

“Many business owners struggle to build personal wealth because business cash flow demands keep their money tied up. Our three-step process creates financial clarity, helps reduce wealth lost to taxes and uncertainty, and positions owners to walk away wealthy when it’s time to exit.”

Most business owners struggle with creating future wealth for their personal economic security because their businesses require so much of the financial resources and cash flow to continue to operate and grow the business.

You started with nothing but an idea and a willingness to outwork everyone else. Years later, you’ve built something real — payroll, customers, a name people trust.

But here’s what nobody tells business owners: most of your wealth is trapped. It’s tied up in a business that’s hard to value, harder to sell, and taxed at every turn. Your “retirement plan” is a vague hope that someone, someday, will buy the company for what it’s worth.

Meanwhile, every year you wait:

  • You overpay taxes on money you’ve already earned
  • Inflation and poor structuring quietly erode what you’ve built
  • Your business becomes more dependent on you, not less — which makes it harder to sell or step back from

You didn’t spend decades building this business just to hand the upside to the IRS, or to find out too late that no one wants to buy it.

You built it so you could walk away wealthy.

The Guide

That’s the problem I solve for with business owners — not as a generalist financial advisor, but as a specialist in one specific question:

How do you turn the value locked inside your business into wealth in your own hands?

I understand how hard you’ve worked—and how much of that effort has yet to become personal wealth. I learned this firsthand when my father died at 51 with nearly all his business value trapped inside the company. The company was ultimately sold for pennies on the dollar. The heartbreak my family endured motivated me to make sure other business owners would never have to experience a situation like ours.

A Three Step System to Extract the Wealth You’ve Built When You Need It the Most!

#1 GROW — Find out what your business is worth AND if you are taking advantage of all the planning opportunities available to you. A three-minute survey, called the Business Owners Personal Viewpoint, gives us enough info to create a “WHERE YOU ARE REPORT”. (A Barometer of your business).

We start with a clear-eyed look at your business value today, and what’s driving — or hurting it. Also, what areas of your planning are effective and ineffective up to now!

#2 PROJECT WEALTH — Stop the leaks- and missed opportunities!

We find where you are overpaying in taxes and where your personal wealth is exposed — then fix it. “OUR DISCOVERY REPORT”

#3 TRANSITION — Build your exit before you need it

We build the plan that lets you leave the business — by choice, not by crisis — with the money in your pocket, not just the memories. It is a plan by “Design” and not a plan by “Default”.

Resources:

Check out this video:  “Business Owners Getting This Wrong: A trapped Retirement plan. 

Get your Free Report: Building Wealth Through Your Business!

Want to discuss, use my calendar:  Toms Calendar  

 

 

Are You Building Your Business by Design… Or by Luck?

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, evaluations, Uncategorized

Are You Building Your Business by Design… or by Luck?

A Four-Pillar Framework for Turning Business Success into Lasting Personal Wealth

By Thomas J. Perrone, CLU, CIC | tperrone@necgginc.com

Executive Summary

Most small business owners don’t lack ambition — they work hard, grow steadily, and reinvest everything back into the company. Yet many reach a point where an uncomfortable question surfaces: is the business growing by design, or simply by default? While revenue climbs, critical areas such as financial planning, risk protection, tax efficiency, and long-term transition are frequently overlooked, not from a lack of care but from a lack of time, clarity, or structure.

This white paper summarizes a structured planning approach — often referred to as a “Destiny Plan” — that aligns a business with its owner’s ideal life and financial future. Rather than adding complexity, the framework organizes the essential drivers of long-term success and security into four pillars: Growth, Protection, Equity, and Transition.

The Hidden Gaps in Growing Businesses

Business owners are often aware, sometimes painfully so, that critical elements of their business are being neglected. Common gaps include:

  • No clear long-term growth strategy
  • Limited protection against unexpected events
  • Inefficient tax planning
  • No defined exit or succession plan
  • Uncertainty about how to convert business success into personal financial security

Left unaddressed, these gaps mean that even an outwardly successful business can remain financially fragile.

The Questions Every Business Owner Should Ask

A useful starting point is self-assessment. Consider the following:

  • Do you have a clear, fail-safe plan to grow, protect, and eventually transition your business?
  • If you had to step away tomorrow — due to retirement, disability, or worse — what would happen?
  • Could you extract your business value in the most tax-efficient way possible?
  • Are you maximizing your compensation and benefits through your business?
  • Do you have a plan for the unexpected — economic downturns, key employee loss, or sudden life events?

Difficulty answering any of these is a signal, not a source of alarm: it indicates that planning is overdue, and that the owner is far from alone in facing this gap.

The Four-Pillar Framework

What most business owners need isn’t more complexity — it’s clarity. A structured approach brings together the key elements that drive long-term success and security into one cohesive strategy, built on four essential pillars.

1. Growth: Building with Purpose

Growth should be intentional, not accidental.

  • Implementing systems that scale with the business
  • Developing strong leadership and teams
  • Focusing on the true drivers of business value

2. Protection: Preparing for the “What Ifs”

Every business faces risk. The question is whether you’re prepared.

  • What if a key employee leaves?
  • What if cash flow tightens?
  • What if you can’t continue running the business?

Proper protection planning ensures the business can withstand the unexpected.

3. Equity: Turning Success into Wealth

Your business is likely your largest asset — are you leveraging it effectively?

  • Accessing equity without unnecessary tax burdens
  • Structuring compensation to maximize benefits
  • Building wealth both inside and outside the business

The goal is not just to grow a business — it’s to create real, usable wealth.

4. Transition: Planning Your Exit Before You Need It

Every business owner will eventually leave their business. The only question is how.

  • Will it be on your terms?
  • Will you receive full value?
  • Is your family or team prepared?

A well-designed transition plan enables an exit that is smooth, efficient, and profitable — whether through sale, succession, or retirement.

A Simple First Step

Owners don’t need to solve everything today — but they do need to start. Even a quick self-assessment can reveal where the biggest opportunities lie. Small adjustments in the right areas can lead to significant improvements in both business performance and personal financial outcomes.

Conclusion

A business should serve its owner’s life, not the other way around. With the right planning, an owner can move from uncertainty to clarity, from reactive decisions to intentional strategy, and from simply building a business to building a lasting legacy. The core question remains: are you ready to start designing your future — on purpose?

TAKE THE FREE BUSINESS OWNER 3 MINUTE SURVEY: With this survey we will send you a report of where you are in your planning today vs. the areas you should revisit to maximize your planning we call this the “Where You Are, and Where You Could Be!” DOWNLOAD

Download your free “Growing Your Business Guide With GWT PLANNING SYSTEM® Download

Also, if you would like to discuss your current situation, I would be happy to help you with a discussion, feel free to contact me: MY Calendar

Youtube:  The Business Owners Who Plan vs. Everyone Else: Luck or Design

Thomas J. Perrone, CLU, CIC | tperrone@necgginc.com

Why So Many Business Owners Outgrow Their 401(k)—But Never Build the Retirement They Deserve

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning, evaluations, Uncategorized

By Thomas J. Perrone, CLU, CIC

If you’ve built a successful business, you’ve already accomplished something most people never will.

You’ve taken risks, created jobs, served customers, and built something of real value.

Yet there’s one question that quietly follows many successful business owners throughout their careers:

“Will my business be enough to fund my retirement?”

For many owners, the uncomfortable answer is, “I hope so.”

The Hidden Retirement Problem

Business owners think differently than employees. When extra cash is available, it usually goes right back into the business.

  • Hiring another employee.
  • Purchasing equipment.
  • Expanding operations.
  • Investing in marketing.
  • Solving the next challenge.

The business always seems to come first.

Over time, something surprising happens. The business becomes the retirement plan.

On paper, many owners appear wealthy because most of their net worth is tied up inside their company. But when it’s time to retire, they discover they haven’t created enough wealth outside of the business to support the lifestyle they’ve worked so hard to achieve.

That’s a risky position to be in.

Your Business Is an Asset—Not a Retirement Plan

Many owners assume they’ll simply sell the business one day and retire comfortably.

Unfortunately, life doesn’t always cooperate.

Markets change. Buyers disappear. Industries evolve. Health issues arise. Family circumstances shift.

A business that looks valuable today may not sell for what you expect tomorrow.

Even if it does sell, taxes, transaction costs, and changing market conditions can significantly reduce the amount you actually keep.

Putting your entire retirement future on one asset—even one you built yourself—is concentration risk.

The wealthiest business owners understand that retirement security comes from diversification, not hope.

Cash Flow Is the Real Challenge

Most owners don’t ignore retirement because they don’t care.

They ignore it because cash flow always seems to demand attention somewhere else.

There is payroll to meet.

Taxes to pay.

Inventory to purchase.

Unexpected expenses.

Growth opportunities.

Retirement planning becomes something they’ll “get to next year.”

Then next year becomes five years.

Five years becomes ten.

Before long, retirement is much closer than anyone expected.

Clarity Changes Everything

The biggest obstacle isn’t a lack of income.

It’s a lack of clarity.

Most business owners have never been shown a strategy that allows them to continue investing in their business while intentionally creating personal retirement wealth outside of it.

Once they understand how to redirect cash flow efficiently, retirement planning becomes less about sacrifice and more about strategy.

That’s when real confidence begins.

Introducing the GWT System

Our firm developed the GWT System® (Grow Wealth Transition) because we repeatedly saw successful business owners facing the same challenge.

They were building exceptional businesses—but not building enough personal retirement wealth.

The GWT System is designed to help business owners:

  • Create a clear retirement roadmap.
  • Build wealth outside the business.
  • Use tax-efficient executive compensation strategies.
  • Reduce dependence on selling the business for retirement.
  • Gain confidence that their personal financial future is as strong as the company they’ve built.

The goal isn’t to replace your business.

The goal is to ensure your business supports your retirement instead of becoming your only retirement plan.

You Deserve More Than Hope

You didn’t build your business by hoping things would work out.

You built it with planning, discipline, and smart decisions.

Your retirement deserves the same attention.

Imagine reaching retirement knowing your lifestyle doesn’t depend on the timing of a business sale or the state of the economy.

Imagine knowing your personal wealth is growing alongside your business.

Imagine having choices instead of uncertainty.

That’s what financial clarity creates.

The Next Step

If you’ve spent years building your business, now is the time to begin building the retirement you’ve earned.

The earlier you create a strategy, the more options you have.

The GWT System helps business owners turn today’s success into tomorrow’s financial independence—so retirement becomes a destination you can look forward to with confidence, not uncertainty.

Because after a lifetime of building your business, you deserve a retirement built with the same level of purpose.

Download the Free Report: “Building Retirement Wealth Through Your Business” 

Landing page for the building retirement wealth through your business. 

New England Consulting Group of Guilford, Inc.

tperrone@necgginc.com

http://www.bpbpgrp.com/tom

The Human Side of Succession!

by YOUR BUSINESS WORTH, posted in Uncategorized

By Ken Somers

The Human Side Of Succession!

Last month May 25, 2026,  I wrote about Estate Equalization:  “ A Guide for Business Succession”. 

As a continuation of this topic, I would like to include a great article in audio form by my friend  Ken Somers from

The Somers HR SOLUTIONS Group 

The article  called “The Human Side of Succession”  is in audio form.   Ken hits on all cylinders in the discussion of estate equalization and succession. 

This is a wonderful perspective on business succession and the dynamics within the family business.  

Feel free to contact Ken for a hard copy of his paper, or to speak to him about the topic. 

linkedin.com/in/kensomers

somershrsolutions.com

ken@somershrsolutions.com

Listen  to Ken’s message:  Also, you can download the audio file

Transferring_power_in_family-run_businesses Ken Somers_copy.mp3

Thomas J. Perrone, CLU, CIC

tperrone@necgginc.com

www.bpbpgrp.com/tom

Estate Equalization: A Guide for Business Succession

by YOUR BUSINESS WORTH, posted in Buy and Sell Agreements, Company Wealth, Estate Planning, One Big Beautiful Bill, Selling Your Business, Tax Efficient, Transfer Costs, Uncategorized

By: Thomas J. Perrone, CLU,CIC

For many business owners, the company is far more than an asset. It represents decades of sacrifice, relationships, risk, and identity. In closely held businesses, the company often makes up the majority of the owner’s net worth. That creates a major challenge when it comes time to transfer wealth to the next generation.

The question becomes simple — but emotionally complicated:

How do you treat all heirs fairly when the primary asset cannot easily be divided?

This is where estate equalization becomes one of the most important strategies in succession planning.

The Problem With “Equal” Ownership

Many business owners instinctively believe that leaving equal ownership shares to children is the fairest decision. Unfortunately, equal ownership often creates unequal problems.

Consider a common scenario:

  • One child has worked in the business for years and plans to continue running it.
  • Another child has built a separate career and has no involvement in the company.

On paper, dividing ownership equally may seem fair. In reality, both heirs usually view the business very differently.

The active heir often sees:

  • Legacy
  • Responsibility
  • Long-term opportunity
  • Commitment to employees and customers

The inactive heir may see:

  • An illiquid asset
  • Lack of control
  • Financial uncertainty
  • A desire for liquidity or income

Neither perspective is wrong. The problem is that these goals frequently conflict.

Without proper planning, family businesses often experience tension immediately after the owner’s death.

Three Common Problems Families Face

  1. Conflict Over Control

Inactive heirs may inherit voting rights or ownership interests in a company they do not understand or participate in. Meanwhile, the active heir is trying to run daily operations and make business decisions.

This can create disagreements over:

  • Compensation
  • Business strategy
  • Distributions
  • Hiring decisions
  • Growth investments

At the exact moment when stable leadership is needed, the business becomes vulnerable to family conflict.

  1. Operational Disruption

Co-ownership between heirs with different goals can slow decision-making and weaken the company.

One heir may want to reinvest profits into growth. Another may want cash distributions. One may focus on long-term value, while another wants immediate liquidity.

Over time, these disagreements can damage both relationships and business performance.

  1. Forced Sale of the Business

This is one of the most dangerous outcomes.

If inactive heirs want to cash out their ownership, the active heir may not have the financial ability to buy them out. As a result, the family may be forced to:

  • Sell the company
  • Bring in outside investors
  • Borrow heavily
  • Liquidate assets

Many successful family businesses are sold not because the company failed, but because the estate plan failed.

What Estate Equalization Really Means

Estate equalization is the process of distributing assets so heirs receive equitable value, even if they do not inherit identical assets.

The key principle is this:

Equal does not always mean identical.

The child running the business may inherit the company itself, while other heirs receive different assets of comparable value.

Those assets might include:

  • Life insurance proceeds
  • Investment accounts
  • Real estate
  • Retirement assets
  • Other liquid investments

The goal is to preserve both:

  • Family harmony
  • Business continuity

A Simple Example

Imagine a business worth $4 million and two children.

Without Estate Equalization

Both children inherit 50% ownership.

The active child wants to continue operating the business. The inactive child wants access to the value of their ownership.

The result is often:

  • Conflict
  • Financial pressure
  • Potential sale of the company

With Estate Equalization

The active child inherits 100% ownership of the business.

The inactive child receives equivalent value through life insurance or other estate assets.

  • The business remains intact
  • Leadership remains stable
  • Both heirs receive fair value
  • Family tension is significantly reduced

The Role of Life Insurance

Life insurance is often one of the most effective tools for estate equalization.

Why?

Because it creates liquidity exactly when the family needs it most — at death.

A properly structured life insurance policy can:

  • Provide immediate cash to non-business heirs
  • Avoid forcing a business sale
  • Help equalize inheritances
  • Reduce estate settlement pressure

In many cases, life insurance proceeds can also be received income-tax-free.

Some families also use trusts, such as an Irrevocable Life Insurance Trust (ILIT), to help manage estate tax exposure and control distributions.

The Importance of Business Valuation

An estate equalization strategy starts with understanding the true value of the business.

Business owners should regularly obtain professional valuations and review:

  • Business value
  • Real estate holdings
  • Investment accounts
  • Retirement plans
  • Existing insurance
  • Estate tax exposure

As businesses grow, the original plan may no longer reflect reality.

A plan created five years ago may be significantly outdated today.

A Real-World Family Dynamic

Consider two brothers.

One spent his life inside the family business. He started young, learned operations, developed relationships with employees, and planned to carry the company forward.

The other became a teacher and built a completely separate life and career outside the business.

Both sons loved their father. But they viewed the company through entirely different lenses.

To the active son, the company represented:

  • Identity
  • Legacy
  • Responsibility
  • Future growth

To the inactive son, it represented:

  • Wealth tied up in an illiquid asset
  • Limited control
  • Potential family conflict
  • Financial uncertainty

The challenge was not greed or selfishness. The challenge was perspective.

Many family business conflicts happen because heirs are trying to assign the same meaning to an asset that represents very different things to each person.

Communication Matters

Even the best technical planning can fail without communication.

Family meetings, governance structures, buy-sell agreements, and clearly defined expectations are critical to long-term success.

Business owners often avoid these conversations because they are uncomfortable. But silence usually creates more problems later.

Clear communication can help families:

  • Understand expectations
  • Reduce misunderstandings
  • Clarify roles
  • Preserve relationships
  • Protect the business

Why Timing Matters

Estate planning opportunities can change quickly due to:

  • Tax law changes
  • Business growth
  • Health concerns
  • Economic conditions

The best time to create a succession and equalization strategy is while the business owner is healthy, involved, and able to make thoughtful decisions.

Waiting too long often limits available options.

Final Thoughts

Family business succession planning is not simply about dividing assets. It is about balancing fairness, control, liquidity, and long-term family relationships.

When business owners focus only on “equal” distribution, they can unintentionally create conflict that damages both the company and the family.

Estate equalization offers a better approach:

  • Preserve the business
  • Protect family harmony
  • Provide fair treatment to all heirs
  • Create clarity for the next generation

A successful succession plan is not just about transferring wealth. It is about preserving the legacy the business owner spent a lifetime building.

Download you free report:

Estate Equalization

Linkedin

www.bpbpgrp.com

tperrone@necgginc.com

The Current Employee Isn’t your Dad’s Employee!  

by YOUR BUSINESS WORTH, posted in Uncategorized

Thomas J. Perrone, CLU,CIC

Relationships with employees have changed over the years, and professionals in the Human Resource field have had to change as the times have.   

Today’s broadcast covers 10 poignant questions about dealing with the ever-changing profile of employees and what it takes to create a strong business culture.   

Our guest Bob Moran discusses a wide range of  situations in business and how smaller companies can adjust to these changes.  

Proactive Positive Employee Relations, LLC 

Robert Moran 

74 Limewood Ave Branford, CT 06405

203 918 8947

Moranrw1@yahoo.com

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

ONE BIG BEAUTIFUL BILL AND How To Use Some Of The Strategies That Have Come Out Of The Bill.  

by YOUR BUSINESS WORTH, posted in Uncategorized

Thomas J. Perrone, CLU, CIC

Ed Pratesi, the Managing Director of Valuation & Transition Strategies, LLC. I help business owners and their advisors achieve a stress-free process to learn the value of their business, how to increase its value, and the development & execution of a transition strategy or strategies. 

Enhanced expense deduction capability – be careful how you execute – too much of a good thing can leave you cash poor and a tax liability 

QSBS – liberalizing the rules allows C 
corporation business owners to potentially shield 100% of their capital gains on sale. 

– This present gifting scenarios to sort of spread the wealth – couple the prospect of valuation discounts and you have a winner 

With the gift tax exemption rises to $15M 

under the Bill – family wealth planning with SLAT’s and other vehicles are enhanced with valuation discounts. Eepratesi@gmail.com  

JOHN SALEMI. John Salemi: OFFICE MANAGING PARTNER, UHY FARMINGTON CT; has thirty years of professional experience, with a specialization in tax issues and management consulting. John can draw upon his practical financial background in addressing the many managerial problems confronting business owners in today’s complex economic and regulatory environment.Jsalemi@uhy-us.com  

R&D Credits /Depreciation changes /Interest deductions – Section 163(j) 

TOM PERRONE Founder and President of New England Consulting Group of Guilford, Inc.  Estate and Business planning, and Executive Compensation. tperrone@necgginc.com  

•Grantor Trust 

•Non-Grantor Trust (SALT) 

•Decanting OF Trusts for IDIT – SWIPE PROPERTY 

•Cash Flow and Executive Benefits 

listen to the podcast…

https://podcasts.apple.com/us/podcast/building-and-protecting-your-business-worth/id1539791693?i=1000736782334

QUESTIONS TO tperrone@necgginc.com