For The Business Owner(s):
Business planning focuses on issues specific to business owners and shareholders. For most business owners, the business is their most significant asset, and the financial success of that business has an immediate impact on the economic security of the family. Without proper planning, you may have difficulty tapping the value of your business to support your retirement, or your family may lose the value of your business at your death.
Our process coordinates the management of your business throughout its life cycle with:
Operation planning focuses on critical components of managing a business in the various states of its life cycle. Common and controllable management issues include sales and marketing, cost/benefit analysis, controls, human resources, tax issues, asset management, and product development.
Starting and running a business carries its own set of risk exposures and there are several factors that can impact how safe your personal and business assets are from risk. These include, but are not limited to: the type of business entity you choose, the state you choose to do business in, as well as how you manage your business, your human resources, and your taxes. Business risk management identifies your options for handling these risks
Executive compensation focuses on both cash and non-cash approaches. The size and structure of the business significantly influences your compensation systems. Large businesses tend to provide owners with sophisticated and sometimes complex compensation formulas. Small businesses tend to adopt a more straightforward compensation approach. Examples of compensation include insurance benefits, qualified retirement plans, stock options, personal performance initiatives, and other tax-advantaged nonqualified plans.
Succession planning focuses on the transition of a business from an existing owner to a new owner. While key factors vary extensively with business type and industry, there are some factors common to all business transitions, including the creation of a sellable business and the formulation of specific transition mechanics at time of sale. Additional succession planning issues include positioning a business for sale, determining valuation and terms, grooming senior management, and creating strategic alliances
Our process coordinates the management of your business throughout its life cycle with:
- Risk management
- Distributions to the owners
- Succession planning
Operation planning focuses on critical components of managing a business in the various states of its life cycle. Common and controllable management issues include sales and marketing, cost/benefit analysis, controls, human resources, tax issues, asset management, and product development.
Starting and running a business carries its own set of risk exposures and there are several factors that can impact how safe your personal and business assets are from risk. These include, but are not limited to: the type of business entity you choose, the state you choose to do business in, as well as how you manage your business, your human resources, and your taxes. Business risk management identifies your options for handling these risks
Executive compensation focuses on both cash and non-cash approaches. The size and structure of the business significantly influences your compensation systems. Large businesses tend to provide owners with sophisticated and sometimes complex compensation formulas. Small businesses tend to adopt a more straightforward compensation approach. Examples of compensation include insurance benefits, qualified retirement plans, stock options, personal performance initiatives, and other tax-advantaged nonqualified plans.
Succession planning focuses on the transition of a business from an existing owner to a new owner. While key factors vary extensively with business type and industry, there are some factors common to all business transitions, including the creation of a sellable business and the formulation of specific transition mechanics at time of sale. Additional succession planning issues include positioning a business for sale, determining valuation and terms, grooming senior management, and creating strategic alliances
Our goal is to meet the following corporate and Executive & Director goals:
- Offer a benefit concept that can be constructed to address the specific needs of the executive and board.
- Implement a benefit plan which meets the financial requirement of the corporation.
- Provide implementation and ongoing plan administration that meets the highest standard of service to the executives and directors involved in the plan and the internal administrator.
- Provide a benefit which can be easily communicated and appreciated by executives, directors and their families.
- Maximize benefit security to the extent allowed.
- Provide tax-favored, tailored solutions to the executive’s particular needs.
- Provide systems and communicate plan information and documentation to personal advisors.
- Increasingly, corporations are using executive and director benefit programs to attract, reward, and retain key executives and directors.
he Capital Management Group helps individuals manage their assets with respect to family goals and objectives, especially after a life-changing event such as partial or full liquidation of their business. By coordinating with your other trusted advisors, we pay special attention to estate, retirement and tax planning. Those details can make or break an individual’s investment strategy. Our trusted team of accredited professionals provides practical advice and cost-effective solutions geared toward minimizing unnecessary risks.
Section 162 PlanS
Often called “executive bonus plans,” Section 162 plans are a simple way to reward top executives. Under this type of plan, an executive purchases a permanent life insurance policy on his or her life. The employer bonuses the employee the premium, which is usually taxable income to the employee and tax-deductible to the employer. The employee controls the policy, including the death benefit and the cash value, which accumulates tax-free until it is withdrawn. In some cases, a “restrictive endorsement” is used, which limits the employee’s access to the policy cash value until a qualifying event occurs, such as the attainment of a certain age or years of service, a disability, or normal retirement. This serves as a type of “golden handcuffs,” allowing employers a way to retain top employees.
Deferred Compensation Plans
In a Deferred Compensation Plan, an executive defers a portion of his or her present compensation until retirement. These plans may discriminate as to which employees are eligible to participate, and are often limited to only a small group of top executives. Under a properly designed plan, no income taxes are incurred by the participant until the money is received. However, an employer may not deduct any amounts paid to plan participants until funds are actually distributed. Often, life insurance policies are used as an informal vehicle for holding and growing the deferred funds.
Supplemental Executive Retirement Plans
In a Supplemental Executive Retirement Plan, the employer provides funding for a defined benefit or defined contribution plan for a select group of employees. A SERP provides for a series of payments to be made to the executive at retirement. The plans also often promise to pay the executive’s spouse a benefit if the executive dies prior to retiring. SERP benefits are often informally funded by life insurance.
Split Dollar Life Insurances
Split Dollar Life Insurance involves the purchase of life insurance where the ownership of the policy cash value and death benefit is divided. The executive owns a portion of each, and the employer, which typically pays all or most of the premium, owns the remainder. This type of insurance plan is often used when a company wishes to provide lifetime protection for an employee while retaining the ability to obtain cost recovery for its policy contributions.
Tax-Deferral Plans
Contribution limits on traditional benefit plans can keep your key executives and employees from meeting their retirement accumulation goals, making it hard to stay with your company long-term. To ensure the future success of your company, securing a solution to this problem should be your number one priority. Our Non qualified Deferred Compensation Strategy is a plan designed features allow key employees the ability to:
Section 162 PlanS
Often called “executive bonus plans,” Section 162 plans are a simple way to reward top executives. Under this type of plan, an executive purchases a permanent life insurance policy on his or her life. The employer bonuses the employee the premium, which is usually taxable income to the employee and tax-deductible to the employer. The employee controls the policy, including the death benefit and the cash value, which accumulates tax-free until it is withdrawn. In some cases, a “restrictive endorsement” is used, which limits the employee’s access to the policy cash value until a qualifying event occurs, such as the attainment of a certain age or years of service, a disability, or normal retirement. This serves as a type of “golden handcuffs,” allowing employers a way to retain top employees.
Deferred Compensation Plans
In a Deferred Compensation Plan, an executive defers a portion of his or her present compensation until retirement. These plans may discriminate as to which employees are eligible to participate, and are often limited to only a small group of top executives. Under a properly designed plan, no income taxes are incurred by the participant until the money is received. However, an employer may not deduct any amounts paid to plan participants until funds are actually distributed. Often, life insurance policies are used as an informal vehicle for holding and growing the deferred funds.
Supplemental Executive Retirement Plans
In a Supplemental Executive Retirement Plan, the employer provides funding for a defined benefit or defined contribution plan for a select group of employees. A SERP provides for a series of payments to be made to the executive at retirement. The plans also often promise to pay the executive’s spouse a benefit if the executive dies prior to retiring. SERP benefits are often informally funded by life insurance.
Split Dollar Life Insurances
Split Dollar Life Insurance involves the purchase of life insurance where the ownership of the policy cash value and death benefit is divided. The executive owns a portion of each, and the employer, which typically pays all or most of the premium, owns the remainder. This type of insurance plan is often used when a company wishes to provide lifetime protection for an employee while retaining the ability to obtain cost recovery for its policy contributions.
Tax-Deferral Plans
Contribution limits on traditional benefit plans can keep your key executives and employees from meeting their retirement accumulation goals, making it hard to stay with your company long-term. To ensure the future success of your company, securing a solution to this problem should be your number one priority. Our Non qualified Deferred Compensation Strategy is a plan designed features allow key employees the ability to:
- Restore lost pre-tax deferrals of salary and bonus amounts,
- Potentially receive a company match or discretionary contribution,
- Select future distribution options, and
- Allocate deferrals into multiple investment options.
