Regardless of how much 
someone is worth, the age old question “Will I run out of money?” is what can prevent a comprehensive estate or business succession plan from getting off the ground. Planning for the future is never easy. Unfortunately for many people with significant wealth, they have not analyzed their personal financial security in relation to their lifestyle. This leads to needless uncertainty about the future. In reality, personal lifestyle needs are a primary driver of any comprehesive planning process. Whether the decision is to transfer wealth, business succession or a sale of a business to a third party, the issue of financial security has to be addressed.
This is especially true when a business owner has to face the music when retiring, transfering control or selling outright. All of a sudden they can’t rely on the business for all of the perks that they have run through the company. Much the same as when you “normalize earnings” when assessing the value of a business, an owner must “normalize” the personal budget and evaluate what they really need to live on the in absence of the operating asset. I have been in situations where a client has told me that they need $30,000 per month on a net after tax basis to live on only to realize later that they need closer to $40,000 per month without the business to lean on for certain lifestyle needs.
In short, you have to figure out what is required to maintain your desired lifestyle. You then can evaluate all of your sources of cash flow, the risks associated with each, etc. Once you’ve done this, gross the number up by ten or twenty perccent to give yourself some wiggle room. Only then can you decide with confidence if you can “afford” to transfer wealth, give up control of a business to successors, sell to a third party, etc. We work closely with our clients to build plans that organize their financial affairs making certain personal desires are incorporated. WealthPoint can help you take a holistic view of your wealth transfer or business succession objectives, and work with you to create a plan that provides security for financial freedom today, while helping you to meet the challenges you may face tomorrow.
