The corporate attorney drafting her resignation letter at midnight. The tech executive sketching business plans during lunch breaks. The financial advisor ready to launch her own practice. They all share the same exhilaration and the same gnawing question: Can I afford to make this leap? The answer depends entirely on financial planning and wealth management.
Career transitions and entrepreneurial ventures promise freedom and fulfillment. They also introduce immediate cash flow challenges, coverage gaps, and tax complications that can derail even the most promising plans. Comprehensive financial planning and wealth management makes the difference between a successful pivot and a financial disaster, transforming uncertainty into opportunity before you make your move.
Calculate Your True Financial Runway
Before submitting your resignation, you need a clear assessment of how long your savings can sustain your actual lifestyle. Effective financial planning and wealth management starts with understanding your expenses. Pull every bank statement and credit card bill from the past year and categorize spending across housing, daily living, discretionary expenses, and annual costs like insurance and property taxes.
High earners consistently underestimate their true expenses. They forget about private school tuition, country club memberships, and the vacation they take every spring. Add a buffer for unexpected costs, and if you're launching a business, plan for at least two years of expenses rather than one.
Your runway fund should sit in high-yield savings or money market accounts, not investment portfolios. This is operating capital where liquidity matters more than returns.
Solve the Healthcare Coverage Puzzle
Coverage gaps expose families to devastating financial risk. Strategic financial planning and wealth management addresses this challenge with several options:
- COBRA continuation lets you keep your employer plan for up to 18 months, though you pay the full premium plus administrative fees.
- Marketplace plans can be more affordable, especially if your income drops during the transition. Premium tax credits may apply, though networks may differ from your current coverage.
- Spousal coverage provides cost-effective insurance if your partner has the applicable employer-sponsored benefits.
- Professional association plans bridge the gap for entrepreneurs through industry group coverage.
Timing matters enormously. Leaving mid-month can mean paying for coverage you barely use. If you have scheduled procedures or ongoing treatments, coordinate your departure to avoid disruptive and expensive gaps.
Make Smart Retirement Account Decisions
Your employer retirement accounts require careful decisions when you leave. Thoughtful financial planning and wealth management considers all your options before making any moves. The default advice is rolling everything into an IRA, but that's not always optimal.
If you're between 55 and 59½ and might need to tap retirement funds. Keeping money in your employer plan allows penalty-free withdrawals. Employer plans also provide stronger creditor protection, which is important if you're starting a business with liability exposure.
IRAs offer far more investment options than most employer plans, giving you control over asset allocation and tax strategies. Self-employed individuals can establish solo 401(k) plans, allowing higher annual contributions and loans against their balance while maintaining strong asset protection.
Navigate Self-Employment Taxes
Starting a business transforms your tax situation. As an employee, you and your employer each paid portions of Social Security and Medicare taxes. Self-employed individuals pay both portions plus income taxes, creating a significant burden without planning.
Set aside a substantial portion of net revenue for taxes from day one. Open a separate account and make quarterly estimated tax payments to prevent penalties and smooth cash flow.
Once your business generates consistent profit, electing S-Corporation status can reduce self-employment taxes significantly. You pay yourself a reasonable salary subject to payroll taxes, and take the remaining profits as distributions that avoid self-employment tax. The trade-off involves additional complexity through payroll processing and corporate tax returns.
Track every business expense meticulously:
- Home office (if you have a dedicated space meeting IRS requirements)
- Technology and software subscriptions
- Professional development and memberships
- Marketing and client acquisition costs
- Travel for business purposes
- Health insurance premiums
Proper financial planning and wealth management means building tax efficiency into your operations from the beginning.
Build Systems That Support Growth
Career transitions succeed when you replace ad hoc decisions with reliable systems. Open a dedicated business checking account immediately to separate personal and business finances, simplifying bookkeeping and protecting personal assets.
Consider working with professionals early. An accountant structures your business entity and manages quarterly taxes. A wealth advisor coordinates retirement planning and investment strategy. An attorney drafts contracts and establishes proper business structure. These relationships may cost money upfront, but prevent expensive mistakes.
Create Your Transition Timeline
Successful career pivots follow a deliberate sequence. Six to twelve months before departure, build emergency reserves and research healthcare options while testing business viability. Three to six months out, review retirement strategies, consult tax professionals, and set up business systems. In your final month, finalize healthcare transitions and complete retirement account decisions.
This measured approach reduces risk while maintaining momentum. You're executing a plan built on solid financial planning and wealth management principles.
Moving Forward With Confidence
The difference between those who thrive and those who retreat back to corporate safety often comes down to financial preparedness. When your runway is adequate, healthcare is secured, retirement strategy is sound, and taxes are managed, you can focus entirely on building your new venture.
At Balboa Wealth Partners, we specialize in helping professionals navigate these transitions. We work with you to structure retirement accounts strategically and create comprehensive plans that protect existing wealth while supporting new ambitions.
Career changes are challenging enough without financial uncertainty compounding the stress. Let's design a plan that gives you the confidence and resources to make your move successfully.
ABOUT JEFF
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic wealth management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Arizona, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
The greatest threat to generational wealth isn't market volatility or poor investment returns. It's the unprepared heir. Without proper financial education, even the most carefully accumulated fortunes can dissolve within a generation. A comprehensive wealth strategy needs to extend beyond asset allocation and tax planning to include something far more fundamental: equipping the next generation with the knowledge and judgment to manage resources responsibly.
Financial literacy transforms children from passive beneficiaries into active stewards. When families prioritize education alongside estate planning, they create a sustainable framework that protects both assets and values across generations.
Why Financial Education Is Non-Negotiable
Children who grow up understanding money develop critical thinking skills that serve them throughout life. Rather than viewing wealth as an entitlement, they learn to see it as a responsibility requiring careful management and thoughtful decision-making.
Starting these conversations early normalizes financial discussions within the family. Children become comfortable asking questions about earning, saving, investing, and giving. This comfort level prevents the secrecy and confusion that often surrounds money in affluent households.
Early financial education also builds confidence. Young people who understand basic economic principles can navigate adult responsibilities with greater ease. They recognize opportunities, avoid common pitfalls, and make decisions aligned with long-term goals rather than short-term impulses.
Perhaps most importantly, financial literacy reduces the risk of entitlement. When children see wealth as something to be managed rather than simply enjoyed, they develop the discipline necessary for preservation and growth.
Practical Approaches to Teaching Money Management
Abstract lectures about compound interest rarely resonate with young minds. Effective financial education requires hands-on experiences that make concepts tangible and relevant. Integrating these practical lessons into your family's wealth strategy ensures that education happens consistently rather than sporadically.
Start with allowances and savings goals
Give children control over small amounts of money with clear expectations. Whether they're saving for a desired purchase or learning to budget weekly spending, real consequences teach valuable lessons that theoretical discussions cannot.
Create transparency around household finances
Age-appropriate conversations about bills, grocery costs, and vacation planning help children understand that money requires active management. They learn that comfortable lifestyles result from deliberate choices, not automatic abundance.
Involve them in philanthropic decisions
Let children participate in charitable giving by researching causes, evaluating organizations, and seeing the impact of donations. This practice teaches values-based decision-making while demonstrating that wealth carries responsibilities beyond the family.
Use banking and investment accounts
Opening custodial accounts allows older children to track real money, observe market fluctuations, and understand risk and reward. These experiences prepare them for more significant financial responsibilities.
Key Educational Opportunities
- Track spending together to build awareness of where money goes and why budgeting matters
- Discuss family investment decisions to demystify wealth building and risk management
- Share entrepreneurial experiences to teach the connection between effort and reward
- Review major purchases to model thoughtful evaluation of needs versus wants
Navigating the Unique Challenges of Affluence
Wealthy families face obstacles that middle-class households rarely encounter. The primary challenge is preventing entitlement while still providing opportunities. Children must understand that access to resources comes with expectations of responsible stewardship.
Overprotection presents another risk. Shielding children completely from financial realities leaves them unprepared for inevitable adult responsibilities. Controlled exposure to money decisions builds resilience without creating undue pressure. Let them make small mistakes with limited funds rather than catastrophic errors with inheritances.
Parents must also maintain consistency in their approach. When one parent emphasizes frugality while another spends freely, children receive mixed messages that undermine financial education. Unified expectations create clarity and reinforce lessons effectively.
Common Pitfalls to Avoid
- Providing unlimited access to funds without accountability or conversation
- Delaying all financial discussions until young adults face major decisions
- Using money as a substitute for time, attention, or difficult conversations
- Failing to model the behaviors and discipline you're trying to teach
Connecting Generations Through Shared Financial Values
Financial literacy strengthens family cohesion by creating common ground across generations. When older family members share their stories of building wealth, facing setbacks, and making difficult decisions, they provide context that transforms abstract numbers into meaningful narratives.
Regular family meetings that address financial topics foster transparency and trust. These gatherings might cover investment performance, estate planning updates, or philanthropic priorities. The goal is not to burden children with adult concerns but to gradually prepare them for future leadership roles.
These conversations also clarify expectations. When younger generations understand the family's wealth strategy, they can align their own goals and decisions accordingly. Ambiguity breeds anxiety and poor planning, while clarity enables confident preparation.
Intergenerational dialogue reveals the values underlying financial decisions. Whether the family prioritizes aggressive growth, capital preservation, or social impact, articulating these principles helps younger members understand not just what to do with money, but why certain approaches matter.
Building a Sustainable Framework for Wealth Transfer
A comprehensive wealth strategy recognizes that financial literacy requires ongoing attention, not a single conversation. The approach must evolve as children mature, introducing increasingly complex concepts at appropriate developmental stages.
Young children learn through allowances and simple savings goals. Teenagers can grasp investing basics, debt management, and the time value of money. Young adults need exposure to tax planning, estate considerations, and sophisticated financial instruments.
Essential Components of Financial Education
- Earning: Understanding income sources, career planning, and entrepreneurship
- Spending: Budgeting, distinguishing needs from wants, and making trade-offs
- Saving: Emergency funds, goal-setting, and delayed gratification
- Investing: Risk and return, diversification, and long-term thinking
- Giving: Philanthropy, impact evaluation, and aligning donations with values
- Protecting: Insurance, estate planning, and risk management
Professional Guidance for Family Wealth Education
Building a legacy that spans generations requires more than financial assets—it demands a strategic partnership between family values and professional expertise. A wealth advisor specializing in family dynamics can help integrate legal structures, tax strategies, and financial foresight into a cohesive plan that evolves with your family's needs. By combining comprehensive planning with intentional financial education, families create the conditions for both wealth preservation and generational harmony.
If you're ready to develop a personalized wealth strategy that protects your assets while preparing the next generation to steward them wisely, now is the time to act. The most successful families don't leave wealth transfer to chance—they plan strategically and educate intentionally.
ABOUT JEFF
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic wealth management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Arizona, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
Even with decades of saving, many retirees are discovering that traditional retirement income planning isn’t enough. Rising lifespans, inflation, and market swings can turn a comfortable 401(k) into a precarious lifeline. Without a broader strategy, financial security in retirement can feel uncertain and stressful.
Smart retirement income planning goes beyond a single account to create multiple income streams. Combining tax-deferred accounts, taxable investments, and alternative assets builds flexibility and resilience. A diversified approach helps retirees protect their lifestyle while adapting to unexpected financial challenges.
The Retirement Savings Gap
A growing concern is the difference between anticipated retirement income and actual future needs. Without accurate planning, retirees risk insufficient funds to sustain their desired lifestyle.
Social Security alone replaces less than half of pre-retirement income for many Americans, with higher earners receiving even less. This highlights the limitations of traditional retirement income planning methods. Individuals need strategies beyond the 401(k) to achieve long-term security.
The retirement savings gap also affects intergenerational wealth, as heirs may inherit less than expected. Incorporating multiple income streams can reduce financial stress for both retirees and their families. Proactive planning is critical to closing gaps and securing lasting wealth.
Supplementing with Taxable and Tax-Deferred Accounts
Relying exclusively on a 401(k) limits flexibility when accessing retirement funds. Adding taxable accounts and tax-deferred accounts such as IRAs provides alternative income options. These accounts allow for strategic withdrawals that can minimize taxes and maintain cash flow during retirement.
| Account Type | Tax Treatment | Key Retirement Benefits |
|---|---|---|
| Roth IRA | Contributions taxed upfront | Tax-free withdrawals in retirement |
| Traditional IRA | Contributions tax-deductible | Tax-deferred growth, potential tax savings now |
Roth IRAs offer tax-free distributions, while traditional IRAs provide tax-deferred growth, creating valuable flexibility. Using these accounts together helps investors manage withdrawals and taxes more efficiently. Retirement income planning that includes these strategies can reduce the risk of running out of money.
Balancing taxable and tax-deferred accounts also allows for more sophisticated investment approaches. Diversification across account types ensures access to funds for unexpected expenses or opportunities. These supplemental accounts complement 401(k) plans and enhance overall financial resilience.
Exploring Alternative Income Sources for Retirement Income Planning
Traditional 401(k) plans rarely convert savings into guaranteed lifetime income. Some investors use fixed annuities to create reliable monthly income streams during retirement. These products can supplement 401(k) distributions and provide stability.
Alternative investments also offer income and growth potential, helping diversify retirement portfolios beyond conventional accounts. Examples include:
- Real estate investments generating rental income
- Dividend-paying stocks providing regular distributions
- Structured products or private investments offering tailored income strategies
Using alternative sources strategically strengthens retirement income planning for long-term security. Combining these with tax-advantaged accounts helps maintain a diversified, resilient retirement strategy. This approach addresses gaps that traditional plans often leave unfilled.
The Importance of Intergenerational Planning
Retirement planning traditionally focuses on making your money last through your lifetime, but this narrow lens misses a critical opportunity. Viewing retirement assets as part of a family wealth continuum changes how you structure accounts, time distributions, and coordinate financial decisions across generations.
Consider the tax implications alone: a retiree in a lower tax bracket withdrawing from traditional IRAs may inadvertently burden heirs with significant tax liabilities when those same accounts pass through inheritance. Strategic Roth conversions during retirement years—when income is lower—can shift this tax burden to a more opportune time, leaving heirs with tax-free assets. This coordination between your retirement income needs and your heirs' future tax situations creates value that benefits both generations.
Beyond tax efficiency, intergenerational planning addresses a fundamental shift in family dynamics. Adult children often become informal financial advisors to aging parents while simultaneously managing their own retirement concerns. Open dialogue about asset location, estate documents, and liquidity needs prevents crisis-driven decisions during health emergencies or market downturns. When families understand the complete financial picture—including insurance policies, digital assets, and business interests—they can make informed decisions that protect wealth rather than react under pressure.
Ultimately, intergenerational planning transforms retirement from an endpoint into a bridge. It ensures that decades of disciplined saving create lasting impact beyond your lifetime while maintaining the flexibility to adapt as family circumstances evolve.
Rethinking Retirement Income Planning
Holistic retirement income planning integrates multiple income sources, tax strategies, and estate planning considerations. Combining 401(k)s with supplemental accounts, alternative investments, and intergenerational planning creates a more resilient financial structure. Individuals benefit from strategies designed to align income streams with long-term goals.
If you are reconsidering retirement income planning and want to explore approaches beyond the 401(k), I can help you map out alternatives that reflect both your goals and risk comfort. Taking a broader view provides peace of mind and long-term financial stability.
ABOUT JEFF
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic wealth management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Arizona, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
Your investment portfolio, property records, banking credentials, and private communications collectively represent your digital wealth. Unlike physical assets secured in vaults or behind gates, this digital wealth exists across countless accounts, devices, and platforms, creating vulnerabilities that cybercriminals actively exploit. For high-net-worth families, protecting digital wealth has become as critical as safeguarding art collections, real estate, and other tangible assets.
Cybercriminals view affluent households as high-value targets, deploying sophisticated tactics to breach accounts and compromise sensitive information. The consequences extend beyond immediate financial loss to include identity theft, reputational damage, and privacy violations that can persist for years. A comprehensive cybersecurity strategy is no longer optional for families seeking to preserve both their digital wealth and peace of mind.
The Evolving Threat Landscape
Wealthy families face targeted cyberattacks because of their substantial assets and access to valuable information. Phishing schemes, ransomware, and social engineering tactics have grown increasingly personalized, often leveraging social media profiles and professional networks to build trust before striking. These attacks exploit human behavior as much as technical vulnerabilities, making awareness and vigilance essential components of any defense strategy.
Cyber threats now reach beyond bank accounts to encompass health records, intellectual property, estate planning documents, and private correspondence. Each connected device and online account represents a potential entry point for attackers. Protecting digital wealth requires monitoring activity across all platforms while implementing security measures that address both technical and human factors.
Strengthening Access Controls
Password management forms the foundation of digital wealth protection. Every account should have a unique, complex password that combines letters, numbers, and symbols. Multi-factor authentication adds a critical verification layer, requiring both something you know (a password) and something you have (a phone or security key) to gain access.
Password managers securely store credentials while generating strong combinations that resist hacking attempts. These tools eliminate the need to remember dozens of passwords or resort to weak, repeated phrases across multiple accounts. Regular monitoring of account activity helps detect unauthorized access quickly, allowing families to respond before significant damage occurs.
Devices containing sensitive information require encryption and restricted administrative access. Limiting who can install software, change settings, or access certain files creates additional barriers against both external attacks and accidental exposure by family members.
Leveraging Cyber Insurance
Traditional homeowner and business insurance policies typically exclude cyber-related losses, leaving families exposed to significant financial harm. Specialized cyber insurance fills this gap by covering identity theft, online fraud, ransomware payments, and related expenses. These policies also provide access to recovery services, legal support, and cybersecurity consultants who can guide families through crisis situations.
Key Cyber Insurance Coverages:
| Coverage Type | Protection Provided |
|---|---|
| Identity Theft | Restoration services and related expenses |
| Data Breach | Notification costs and credit monitoring |
| Ransomware | Payment coverage and negotiation support |
| Fraud Loss | Reimbursement for unauthorized transactions |
| Legal Fees | Defense costs for cyber-related claims |
Cyber insurance works most effectively when paired with strong preventive measures. Insurers often recommend regular security audits and updated practices to maintain coverage eligibility. Integrating insurance into a broader strategy ensures families have both protection and recovery resources for their digital wealth.
Conducting Regular Security Audits
Systematic audits of online accounts, devices, and financial portals help identify weaknesses before attackers exploit them. These assessments should evaluate software updates, network security configurations, access permissions, and user behaviors across all household devices.
Every family member’s technology requires attention, including smartphones, tablets, and computers used by children or less tech-savvy relatives. Outdated software, weak passwords, and unsecured home networks create vulnerabilities that compromise the entire household. Third-party cybersecurity professionals can provide objective assessments and recommend specific improvements tailored to family needs.
Regular audits also reveal accumulation of unnecessary accounts, outdated apps, and forgotten subscriptions that expand the attack surface. Consolidating and eliminating unused digital services reduces exposure while simplifying ongoing security management.
Building a Culture of Cyber Awareness
Technical safeguards alone cannot protect digital wealth. Family members must understand and practice safe online habits to reduce risk. Education should focus on recognizing phishing attempts, using secure networks, avoiding oversharing personal information, and responding appropriately to suspicious activity.
Regular family discussions about digital security reinforce best practices and encourage accountability. Establishing routines such as monthly password updates and device security checks builds consistency. Emergency response plans ensure everyone knows how to react quickly if they suspect a breach or compromise.
Essential Cyber Awareness Practices:
- Recognize and report phishing emails and suspicious messages immediately
- Use secure, private networks and avoid public Wi-Fi for financial or sensitive activities
- Limit sharing of personal details, travel plans, and financial information on social media
- Verify requests for money transfers or sensitive information through separate communication channels
- Keep software and operating systems updated on all devices
- Review account statements and transaction histories regularly for unauthorized activity
Collaboration with financial advisors and legal counsel ensures cybersecurity measures align with estate planning, investment management, and business operations. This coordination creates consistent protection across all aspects of family wealth management.
Taking Action to Secure Your Digital Future
Protecting digital wealth is not a one-time effort but an ongoing commitment that adapts to new risks and changing family circumstances. By combining technical measures with awareness and planning, affluent households can maintain security, privacy, and confidence in their digital lives.
If protecting your digital wealth concerns you, professional guidance can help assess vulnerabilities and implement stronger safeguards tailored to your family’s needs. Together, we can design strategies that preserve both financial security and personal privacy in our increasingly connected world.
ABOUT JEFF
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic wealth management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Arizona, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
By Jeff Gilbert
For business owners, wealth management can be complicated. Risk management is arguably one of the most important components of a holistic wealth management strategy.
In this post, I take you through three scenarios that can sink your business and explain how to adequately shield yourself from these major risks.
Scenario 1: You’re Forced to Sell
If your company is successful and has been for some time, you might not think there’s any situation where you could be forced to sell. However, in my years assisting business owners with risk management, I’ve seen several unexpected (and unfortunate) scenarios play out.
Here’s one. Suppose you and your business partner share ownership of your company. Your business partner suddenly passes away, and their shares of the business go to their spouse.
You want to purchase your late business partner’s shares from their spouse, but you don’t have the liquid capital to do so. As a result, you’re forced to sell your shares.
How to Shield Yourself and Your Company
Fortunately, there’s a fairly straightforward risk management strategy to avoid this situation: buy/sell insurance. It’s a policy that can buy out your business partner’s shares if they die.
Scenario 2: You’re Crushed by a Lawsuit
Any good risk management plan addresses the possibility of lawsuits. For example, suppose you run a roofing business. One of your employees makes a mistake and causes significant damage to a customer’s roof. The customer files a lawsuit to fix the damage. You don’t have adequate liability insurance, so the lawsuit bankrupts your company.
How to Shield Yourself and Your Company
Most people realize that insurance is a critical part of risk management. However, some make the mistake of thinking they don’t need to review their insurance policy once it’s established. Regularly reviewing your company’s insurance policies can help you stay ready for any lawsuit.
Scenario 3: Taxes Force the Next Generation to Sell
If you’re like many successful business owners, you hope to pass your company down to your children one day. You might have already created a business succession plan as part of your estate plan. However, if your business grows in value and you don’t take estate taxes into consideration, your children could be forced to sell.
Here’s an example. Suppose you’ve spent your life growing your business, which is now valued at $30 million. The federal estate tax on your business’s value (not even counting other assets) would be more than $6 million. If your children don’t have sufficient wealth to pay those taxes, they may be forced to sell the company.
How to Shield Yourself and Your Company
Your risk management plan should address how estate taxes should be paid after your death. I often recommend that my clients get a life insurance policy to cover their estate taxes.
Unfortunately, many business owners (and many people in general) put off estate planning because they think they’ll get around to it later. This is a mistake. If you die without an up-to-date estate plan, you’ll saddle your loved ones with financial uncertainty while they’re already grieving.
Ready to Create Your Risk Management Plan?
Even if you’re an experienced businessperson, collaboratively creating a risk management plan is good practice. An outside advisor can sometimes spot risks you may have missed.
At Balboa Wealth Partners, we understand that a quality risk management plan isn’t static; it evolves with your company. If you want to learn more or think our firm may be a good fit for you, contact us today. If you’re ready to schedule, give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.
About Jeff
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Jeff and Balboa work with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
