Business owners are busy just about every day of the year, and it is easy to put aside consideration of business, retirement and estate planning. But owners do need to think about long term planning, because eventually the long term becomes the short term. Here are some ideas to think about between now and the end of the year.

Business Planning:

  • If you have a shareholders' or buy-sell agreement, review it to see if any changes are needed. These might include updating values and ensuring that there is adequate life insurance for buyouts.

  • Should your key employees have confidentiality and non-complete agreements? Effective employment related documents can protect your business from raids by competitors.

  • Many businesses have policies as to retention and destruction of documents. Without such a policy, it is easy to feel that you are drowning in paper.

Retirement Planning:

  • Deferred compensation arrangements, which may include employment agreements, must be amended by December 31 to comply with Section 409A of the Internal Revenue Code. Failure to do this could have serious tax consequences.

  • Owners should consider whether qualified retirement plans, including 401(k) plans and profit-sharing plans, are working in a satisfactory way. Should the plan be amended to provide a different benefit structure, or terminated?

  • Beneficiary designations for retirement plans and IRAs are important will substitutes. Do you know where your beneficiary forms are and what they provide? There is valuable tax planning that is possible depending on who the beneficiaries are and how they receive payment.

Estate Planning:

  • Is this a good time to make gifts to family members? The gift tax annual exclusion is $12,000 per donee, which is a tax-efficient method of passing wealth on to the next generation.

  • A Section 529 college savings account is another method of helping children and grandchildren, in this case to defray the ever-increasing costs of higher education.

  • Financial powers of attorney and healthcare directives are essential documents for everyone, making life much easier when someone becomes disabled or has serious health issues.

  • Everyone should have a will and keep it up to date with changes in the applicable law in recent years. Bear in mind that when the next President is elected, there will be more changes in tax law.

  • Life insurance planning is often difficult to understand. This type of planning is changing rapidly, and everyone with an older life insurance policy should have it reviewed by an insurance professional. For larger life policies (more than $500,000), the use of a life insurance trust can provide valuable tax-saving benefits.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.