Thomas J. Perrone, CLU

New England Consulting Group of Guilford, Inc.

Last Will of Paul Procrastinator

First: I direct the Probate Judge to appoint anyone of his

choosing to administer all property in my name and

distribute it under the terms of this will.

Second: I direct that all of my assets be converted to cash,

all of my debts paid, including taxes, probate fees,

administrative fees, and attorney’s fee.

Third: I direct that one-half (if I am survived by one child) or one-third (if I am survived by two

or more children) of my separate property, be paid to my spouse.

Fourth: I direct that the balance of my estate be distributed outright, and in cash, in equal

shares to my children.  If any child be a minor, I direct that his share be held by a guardian for

his benefit.  The guardian may be anyone of the court’s choosing.

Fifth:When each of my minor children attains age 18, I direct that his share be then paid to

him outright, regardless of his financial or emotional maturity.

Sixth: In the event that my spouse does not survive me, I direct that his/her share be added to

the children’s shares created under Articles Fourth and Fifth

Seventh:If none of my children survive me but my spouse does, I direct that the remainder

under Article Third be distributed outright in the following manner:

●One-half of my separate property to my spouse.

●The balance to my parents, if living, otherwise to my brothers and sisters or their heirs.

Eighth:If I am not survived by my spouse, children or parents, I direct the Probate Court to

seek out my closest blood relatives and divide my estate among them in a way which gives an

equal share to my closest relatives or their descendants.

Ninth:If no relatives are located, I direct that all of my property go to the State.

Learn about the GWT planning system to help you organize you estate and business.              Click Here TO VIEW THE VIDEO.

By: Thomas J. Perrone, CLU, CIC

A business appraisal is a process of determining the economic value of a business, giving owners an objective estimate of the value of their company ³. It is typically done when an owner is looking to sell all or a part of their business, or merge with another company. Other reasons include if you need debt or equity to expand your business if you need a more thorough tax analysis or if you plan to add shareholders ³. 

If you are a business owner, you may need a business appraisal for various reasons such as:

1. Selling your business: A business appraisal can help you determine the fair market value of your business and help you set a realistic asking price ³.
2. Mergers and acquisitions: A business appraisal can help you determine the value of the business you are acquiring or merging with ⁴.
3. Estate planning: A business appraisal can help you determine the value of your business for estate planning purposes ⁴.
4. Tax purposes* A business appraisal can help you determine the value of your business for tax purposes ⁴.
5. Litigation: A business appraisal can help you determine the value of your business in case of a legal dispute ⁴.

If you are looking for a professional appraiser to assess your business’s fair market value, you can consider contacting P C Appraisal Services located in Branford, CT ². They specialize in residential and commercial real estate property appraisals and have a 5-star rating on their website ².

Source: Conversation with Bing, 1/2/2024

(1) How to Do a Business Valuation – U.S. Chamber of Commerce. https://www.uschamber.com/co/run/finance/business-valuation-how-to-guide.

(2) What is a Business Appraisal and When a Small Business … – BizBuySell. https://www.bizbuysell.com/learning-center/article/what-is-business-appraisal/.

(3) P C Appraisal Services. https://www.pcappraisal.org/home.

(4) . https://bing.com/search?q=business+appraisal.

(5) What is a Business Appraisal – Website Closers. https://www.websiteclosers.com/resources/what-is-a-business-appraisal.

(6) Business Appraisals: What Are They? – The Balance. https://www.thebalancemoney.com/what-is-an-appraiser-how-does-an-appraisal-work-398126.

For  a Free Business Valuation Guide, CLICK THE LINK.  Your report will download immediately! 

THOMAS J. PERRONE, CLU, CIC

tperrone@necgginc.com

BY: Thomas J. Perrone, CLU, CIC

One of the biggest problems with high earning business owners is the limitation on the amount of contributions they can make towards the 401k or other contributory plans. The limitation is driven by the makeup of the employee group and the comp 

The problem is trying to fund their final earnings of the last 3-5 years with a contributory plan where there are limitations to the number of contributions they can make.  

For example, a business owner currently earning $250,000 versus an employee earning $100,000.  

When you compare the same situation with an employee who is earning $100,000 a year you can see the inequities in the level of funding of a retirement plan and the final earnings. 

Because the high earning owner (HEO) is limited, they can’t use the contributory plan to fund a sizable percentage of their retirement. Consequently, executive compensation programs are needed to make of a good part of the difference in final pay.  

The video discusses one of the ways to make up the difference for the HEO. 

Endorsement CEEP 

It’s very common to find this combination of family dynamics frequently! Blended families make up a good part of our family structure and like all families, they need planning.

However, in this type of situation, the final distribution of assets is not necessarily uniform. Each parent wants to treat their children differently in most cases, however, many times both spouses are on the same page in protecting each other.

In this short video I cover some of the planning objectives when you combine the blended family along with an S Corp ownership, and the goal or retaining a marital deduction.

By Thomas J. Perrone, CLU, CIC 

A much-overlooked area of planning for small business owners is their buy and sell planning.  A business is fluid and forever changes its financial position. In many cases industry changes and markets affect the value of the company.  Because of the ongoing changes in business value and growth pattern, the buy and sell agreement should be reviewed more than periodically. I suggest the professionals and parties to the agreement review the value and the elements of the buy and sell, yearly.  There are two parts of the review. 

2. The agreement should be reviewed for the “triggers” which will set in motion the BSA.  There are many BSA that have been executed which only deal with the death, disability, and retirement of the owners.  Some other triggers would be bankruptcy, divorce, non-voluntary termination, voluntary termination.   

The Funding:   

This area strives to make sure the parties are sufficiently liquid when needed to fulfill the obligation of purchasing the ownership value.  

Cross purchase: Members buy and own life insurance on other members.  For example, if you had four owners, twelve policies would be in force (3×4).   

Endorsement: The Company purchases and owns life insurance on the parties to the agreement. At their death, the company receives the proceeds and purchases the value from the deceased’s estate.  

The endorsement method is simple, as the company will purchase life insurance on the party to the agreement.  For example, if there are only four owners, the company will purchase life insurance on each of them, or four policies.  Upon the purchase of the decedent’s equity, the surviving owners will not have an increase in business cost basis.  

Using the LLC 

The LLC is set up to purchase life insurance policies on each owner.  Upon their death, the LLC collects the proceeds and purchases the ownership for the surviving owners.  

There is no “transfer for value,” as partnerships are an exemption for the transfer of value.  The remaining owners have a cost basis increase.  

This short video discusses buy and sell in more detail.  

BUY AND SELL MISTAKES FUNDING 

If you would like our comprehensive business planning guide, click the link and the report will download immediately.  

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