Page 36 - ATR 3 2012 web 2

and the Joe Robbie family that owned
the Miami Dolphins, have been forced
to sell their assets because they didn’t
have enough liquidity to pay their estate “there is a higher thaN 90 perceNt probability
taxes. that the iNterNal reVeNue serVice will audit
According to the Resnicks, there a compaNy’s assets if they are beiNg passed
are three ways to pay an estate tax. The from oNe geNeratioN to the Next.”
first is paying cash, which means the
company and family have to keep a lot
of assets in the bank rather than using —terry resNick
them to build wealth. The second is a co-owNer
forced sale of assets, which means the resNick associates
owners won’t get fair market value.
The best way is paying for the estate
tax through a life insurance policy. The
Resnicks said business owners need to ize there is a problem until they have “There is a higher than 90 percent prob-
appreciate that life insurance is usually paid premiums for many years and ability that the Internal Revenue Service
their second largest asset apart from have reached old age. The Resnicks are will audit a company’s assets if they are
the business and the assets themselves. working to help a Florida couple change being passed from one generation to the
Unfortunately, many business owners policies they created two years ago next,” Terry Resnick said.
don’t understand their policies, haven’t worth $20 million for each of their four The Resnicks said owners who want
made sure they have the insurance they children that currently are 100 percent to pass on their businesses to the next
need and haven’t created policies that taxable. generation need to begin grooming
can’t be taxed when the inheritances The final item on the checklist is to their successors years in advance. That
are disbursed. Then they don’t real- ensure a business is valued accurately. can be difficult for someone who has
spent decades building a business from
nothing. However, it usually doesn’t
work well when heirs are simply handed
the business when the owner retires or,
worse, inherit it unprepared when the
owner dies suddenly.
“It’s also very important that if
you have that next generation work-
ing, that you start to acclimate them
and introduce them and build the rela-
tionships you have with your advisors,
your lending institutions,” Lee Resnick
said. “Because ultimately when the day
comes that they do take over, if they
don’t have those relationships, you’re
really putting them in an unfair situ-
ation because they’re not on the same
level as you were when you were run-
ning the company.”
Business owners should review
their plans periodically to make sure
they are up to date, especially when the
family structure changes. In fact, Terry
Resnick said having no plan is often
better than having a bad plan because
a bad plan can give a business owner a
false sense of security.

36 aRkansas TRucking RePoRT | issue 3 2012