Quick Stats

Quick Stats

    You are here

    INDEPENDENTS REPORT: The best-laid plans

    Estate planning at its most effective includes more than just divvying up the assets.

    When it comes to the issue of how to handle estate planning, leadership expert Vince Crew has some interesting advice for the heads of family-owned retail businesses -- advice that's liable to ignite some controversy if discussed at the next family board meeting.

    "Avoid the mistake of leaving it all to the kids," says Crew. In other words, there should be more to a family legacy than money. "As a parent, concentrate on transferring to the next generation assets of the heart."

    Crew, president of Naples, Fla.-based REACH Development Services, says sharing such "assets of the heart" helps children to grow up responsibly and develop the character, discipline, ability, and drive to earn their own fortunes.

    "Understand the long-term value of passing on that which only a parent can: work ethic, good citizenship, caring for others, a spiritual foundation, integrity, memories, love, and laughter," he explains. "Leave 100 percent of yourself to your kids, and maybe 30 percent of your money. The rest? Give it to those who weren't blessed by your love as a parent."

    The reality is that questions about how much to leave and whom to leave it to aren't so easy to answer. What exactly should parents leave to their children and their favorite charities? How much is fair? And how can they be assured that any financial inheritance will be wisely invested?

    The answers are likely to be different for each individual. However, to simplify the process, Crew suggests that owners consider what he has defined as the 4 P's of giving:

    -People: "First, take a look at the people with whom you've shared your life -- they will be a consideration when the time comes to distribute your wealth," says Crew. "This includes your spouse, children, special friend, neighbor, relatives, employees, and others."

    -Property: Actual cash, along with other assets such as real estate, investments, vehicles, jewelry, and insurance policies can be appropriate for charitable giving. "Many successful business owners possess a variety of assets that could prove beneficial to furthering a charity's mission as an outright gift or conversion into cash," notes Crew. "Consider service organizations and professional and trade associations that could benefit from a contribution long after you're gone."

    -Professionals: Enlist the help of trusted advisers who will formalize your estate planning: your spouse, personal advisers, financial planners, and lawyers.

    -Plans: Ensure that all legal documents are current and up to date.

    Of the final point, Crew says, "Legal documents include a current will which accounts for and addresses how all of your property is to be divided, a living will which addresses end-of-life/heroic means of sustaining life, and a durable power of attorney to ensure that your legal matters are carried out based on your wishes."

    He continues: "A durable power of attorney for health care is necessary to carry out your health care wishes in the event you are unable to speak, write, or think clearly. Furthermore, for those obligated to care for young or special-needs children or relatives, assigned guardianship provisions must be documented.

    "Lastly, consider including as part of your estate planning a written trust," suggests Crew. "Wills are public record and can be viewed by anyone. A trust is confidential and can provide the maximum in tax benefits and control over asset distribution, including a 'spendthrift' provision to ensure a less responsible beneficiary doesn't blow the money all at once. It also provides minimum ability to contest after the fact. In my view, trusts are also an excellent tool for charitable considerations."

    And speaking of charity, Crew advises due diligence before deciding to become one of the food industry's greatest philanthropists. "Determine whether or not your favorite charity is worthy to share in your life's work," he says. "Visiting the operation and walking the halls can speak volumes as to how efficiently and effectively the organization is managed. If possible, spend some personal time volunteering for the charity and experience the group's work firsthand.

    "Get concrete evidence that the programming that's taking place is truly making a difference in the community and is forwarding the charity's mission," he adds. "Time and money are too precious to simply write out a check to an organization that is perhaps not as spiffy as it should be."

    Related Content

    Related Content