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Business Succession Planning

Preserving Equity During Transition

You’ve worked your whole life to build and to maintain a profitable business. Now, it’s time to enjoy the fruits of your labour.

Did you know that sheltering investments from higher tax rates can be a key part of retaining value during the transition? The right life insurance policy, owned by your business, can protect your investments and make a big difference to the bottom line.

How Tax-Advantaged Life Insurance Policies Protect Your Earnings

You’re making plans to pass your business on to the next generation of owners. Along the way, you’ve bought into various investment vehicles. These may make your earnings vulnerable to high tax rates. Do you know how much you’re paying in taxes from those investments?

You will substantially lower your tax burden by moving your investments from a highly taxable environment to a life insurance policy.

How It Works

When you establish a permanent life insurance policy owned by your corporation (either whole life or universal life), investments within the policy will be sheltered from taxes.

Not only do the beneficiaries save taxes, the policy itself has a guaranteed cash value. As long as the money remains in the life insurance policy, it grows in a tax-advantaged way.

The corporation becomes the beneficiary, receiving a tax-free death benefit, which it will credit to its capital dividend account. The remaining shareholders can then be paid in tax-free funds.

With Palladium Insurance’s flexible legacy solutions, you maintain complete control of your policy. You can even choose to tap into its cash value at any time.

Learn More Advantages of Business-Owned Life Insurance

Putting the “Success” in Business Succession Planning

Creating a business succession plan is a big project, and most organizations don’t have the knowledge of the fundamental steps or how to apply them to their unique situation.

In other words, your team finds succession planning hard because everyone finds it hard — even enterprise-level organizations.

One key is to ensure you’ve got the right team in place to help you make sure all the bases are covered. When you’re assembling your professional advisory team, be sure to include a Palladium Insurance expert along with your lawyer, accountant, financial planner, bank representative and other advisors.

How to Start Planning for a Family-Owned Business