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In the rush of day-to-day business activities, many business owners become so engrossed in running their companies, they inadvertently put their personal finances on the back burner. As your clients’ businesses grow and develop, it’s important they keep their priorities on track so their business activities are consistent with their personal financial goals.
Drawing upon our extensive experience helping business owners and entrepreneurs, Churchley Financial Group can help you and your clients prepare for, plan and fund various business strategies designed to protect your clients and help them accomplish their financial goals. In many cases, life insurance is the most appropriate and tax-favored funding vehicle for these strategies. Examples include:
Buy-Sell Arrangements
Key Person Insurance
Non-Qualified Executive Benefit Plans
Business Continuation Planning
If a business partner dies, is disabled or decides to exit or retire, a Buy-Sell Arrangement protects the business and remaining owners and allows the business to move forward. Additionally, it helps fix the value of each owner’s business interest.
It’s important to note that a buy-sell agreement is useful only to the extent it is adequately funded on the date of the “triggering event.” Churchley Financial Group can guide your client in the process of developing and funding a buy-sell agreement suited to the needs of their business. The ideal buy-sell agreement is funded and prepared in a manner that is easy for the parties to understand, is reasonably priced, is easily administered, and will not adversely affect the working capital or credit position of the business or professional practice. For most situations, life insurance is the effective vehicle for managing this risk.
The death of a key person can result in serious consequences for your client’s business. Credit could be substantially impaired, or even worse, loans would be called if the key person was a co-signer. The loss of that “intangible asset value” represented by the key person may be greater than that caused by a fire, flood, or other catastrophe.
When insuring a loss through death, Key Person Life Insurance can provide an important source of revenue replacement. Further, the insurance can be designed to accumulate reserves that may be used ultimately for retirement, a termination replacement, or the retraining of successors.
Many companies design their Key Person coverage as a Split Dollar Plan which has the potential for enhanced tax treatment under the 2017 Tax Act. This is an arrangement between an employer and an employee to share the costs and benefits of a life insurance policy. These plans are widely used in gift and estate planning and can be an important part of the compensation package for key executives.
Business owners and key executives face tax issues and retirement saving challenges due to restrictive legislation that dramatically limits the amount of income that can be deferred or contributed to the company’s qualified retirement plan. For this reason, a growing number of companies are turning to nonqualified deferred compensation plans to augment owners’ and key executives’ retirement benefits and overcome many of the regulatory restrictions that apply to qualified retirement plans.
As professionals with many years of experience in executive compensation strategies, Churchley Financial Group’s role is to serve as an advocate for you and your client—helping your client define their specifications and compare existing programs with their current goals. We help you and your client orchestrate the plan; assemble the required specialists; coordinate arrangements with the advisory team; and guide every aspect of the plan’s development, including funding options.
Our services include the design, funding, and administration of executive benefit programs such as:
Non-qualified deferred compensation plans
Supplemental executive retirement plans
Executive life insurance and disability income plans
Pre-retirement plan distributions to support funding for college, second homes and other life goals
The intended end result is a custom-built solution structured around your client’s unique requirements—whether it’s:
Retaining key personnel;
Restoring executive benefits lost to government limits on qualified retirement plans;
Rewarding executives and aligning their behavior with the company’s long and short-term goals;
Recruiting key executives to the company; or
Retiring executives as part of a well-coordinated succession strategy.
What most business owners don’t realize is that handing over the baton to a new owner, a key employee, or family member is a process, rather than a single event. The more time allotted for planning, the better the outcome will be, particularly with regard to minimizing the tax consequences of transferring business ownership. To effectively manage the complexities of succession planning, Churchley Financial Group follows a proven process designed to help your clients ultimately reach their destination by taking it one step at a time. In particular, we work as part of a well-coordinated team of advisors to help you and your client:
Review and monitor the plan
During each step of the process, Churchley works closely with you and your client to:
CHURCHLEY FINANCIAL GROUP LLC
3000 Lawrence Street
Denver, CO 80205
T: 303.468.2100
SECURITIES OFFERED THROUGH VALMARK SECURITIES, INC. MEMBER FINRA, SIPC. INVESTMENT ADVISORY SERVICES OFFERED THROUGH VALMARK ADVISERS, INC. A SEC REGISTERED INVESTMENT ADVISOR, 130 SPRINGSIDE DRIVE, AKRON, OHIO 44333. 1-800-765-5201. CHURCHLEY FINANCIAL GROUP, LLC IS A SEPARATE ENTITY FROM VALMARK SECURITIES, INC. AND VALMARK ADVISERS, INC.
ANY TAX ADVICE CONTAINED HEREIN IS OF A GENERAL NATURE AND IS NOT INTENDED FOR PUBLIC DISSEMINATION. FURTHER, YOU SHOULD SEEK SPECIFIC TAX ADVICE FROM YOUR TAX PROFESSIONAL BEFORE PURSUING ANY IDEA CONTEMPLATED HEREIN. THIS ADVICE IS BEING PROVIDED SOLELY AS AN INCIDENTAL SERVICE TO OUR BUSINESS AS INSURANCE PROFESSIONALS.