A.T. Financial Newsletter
Succession planning:
What are you most afraid of?
According to the Canadian Federation of Independent Business, more than 65% of Canadian business owners plan to exit their businesses within the next eight years. Yet only 9% of them have a formal, written succession plan and 51% have no plan at all.1 Yikes!

Failing to plan = planning to fail
Whether you own a "bricks and mortar" business or are an independent professional, such as a doctor, lawyer, accountant, or consultant, a succession plan is essential for the well-being of you, your family, and your business. An effective succession plan can help secure your financial future, allow for a smooth transition of your assets to your family and business partners, and reduce your tax burden.

What's holding you back?
If you're looking to retire by selling, transferring, or otherwise winding down your business in the next 10 or 15 years, and you don't have a plan in place, the question is, why not. Are you afraid of instigating family conflict? That the business will fail? That you haven't taken it as far as you had hoped?

Or perhaps you're simply reluctant to admit that one day you will need to exit your business. After all, the hands-on tenacity of its owner is often a key factor in a business's success. But that same quest for control can actually hamper your business if it's holding you back from creating a succession plan.
Three key steps
We can help you start the planning process with these three key questions:

 1. Who will take over the business? Do you hope to sell your business, transition it to a key employee, or hand it down to a family member? Perhaps you're planning to close it rather than sell it.
 2. What happens if…? By investigating a few if/then scenarios, we can mitigate the financial strain that can happen when things don't go according to plan. For example, what if you change your mind about who will take over? What if your business starts losing money? What if you are the key employee and the owner dies before you take over?
 3. Where will the money come from? Life insurance often plays a key role in succession planning. It can provide a guaranteed, cost-effective source of cash to fund a buy-sell agreement, minimize taxes on death, and ensure an inheritance if there are family members who will not be taking over the business. It can also provide a safety net should something catastrophic happen in the interim, such as the premature death of your business partner.

Ultimately, a truly comprehensive business succession plan should be enacted with the guidance of an advisory team, including your tax, legal, trust, and accounting specialists. We would be pleased to work with your other advisors to help you with this important transition.
1 Canadian Federation of Independent Business, "Passing on the Business to the Next Generation," November 2012.
A different kind of
Term life insurance is usually purchased to cover specific needs and, once inplace, may not be top of mind again until the policy nears the end of its term. But you could be short-changing yourself with this kind of "set it, and forget it" approach.

Your needs may change over time
If you have term insurance, chances are you bought it to cover debts, such as a mortgage or investment loan, and protect your young family from financial hardship in the event of your death. It may have been the most economical protection you could afford.

As the policy approaches maturity, you typically have the option to renew the term, purchase a different term, or convert to a permanent policy. But in most cases, you don't have to wait until the policy runs out in order to convert. Many term policies allow you to renew or convert at any time before the end of the term.

The benefits of acting early
One of the key benefits to converting is that you may be able to do so without having to prove your insurability. This would be especially beneficial if you've been ill or otherwise suspect your premiums could rise.

Of course, whether or not to convert your policy depends on what you bought it to protect and what you need it to do now. We can help you make the best decision relative to your current situation and your current needs.
For more information,
please contact us at

(647) 833-2782