It all adds up

Aug 08, 2014 | Dian Chaaban


I’ve been attempting to hone my golf skills more seriously for about four years now and while I would still categorize myself as ‘terrible’, I seem to improve slightly every year by making the smallest adjustments (recall last year’s WOTS where I raved about the difference opening my club face made). This past weekend I was able to drive the ball further and straighter than I thought possible just by widening my stance. If only I could turn back time, I wouldn't have had to call so many mulligans...


All of these tiny details add up and can end up making the biggest difference over the course of years – much like the day to day planning one would do today for a longer term goal, like selling a business or retirement.

Earlier this week, I met with clients of mine who are planning on selling their business within the next 5 years. Succession planning should ideally start five to 10 years before your anticipated retirement age – yet most business owners are so busy running their business that they tend to cram the succession planning into the 11th hour. Since you will typically only sell your business once and retire once, you unfortunately won’t know what you don’t know, until it’s too late.


With the right advice and leadership, you can run an active business while establishing your exit strategy to help put you on the path to a smooth transition. Here are some of the items we discussed during our meeting:

  • Financial plan. A financial plan is a critical component of a business succession plan and will determine if you have adequate resources to support your retirement lifestyle and contribute more to your retirement fund than is currently permitted by a Registered Retirement Savings Plan (RRSP) through an Individual Pension Plan (IPP)
  • Estate freeze. An estate freeze using a family trust is a common business succession and income-splitting strategy that transfers some or all of the future growth of the business to the next generation, helping to minimize and defer tax. Ensure that the estate freeze is flexible enough so that you can possibly reverse it if necessary.
  • Shareholder’s agreement. A well-drafted shareholder’s agreement provides a framework for the smooth operation of a business and addresses business ownership issues when certain triggering events occur, such as death, disability, retirement or marriage breakdown.
  • Insurance. Appropriate disability and life insurance can help ensure that the business continues and your family is able to maintain its lifestyle in the event of disability or premature death. Insurance may also be a low-cost solution for funding taxes at death and funding buy/sell agreements.
  1. those of you who avoid the golf greens and say that you are coincidentally "busy washing your hair" every time you are invited to play a round of golf, our Women of Ambition event on Tuesday, August 12th might be of interest to you – it’s an educational confidence-boosting session that will change the way you look at golf and your financial future. Read more here.