The 4 Cs of Conflict-Free Family Businesses
Focusing on growth is harder when your co-owners are your relatives
by Fred Pidsadny for ProfitGuide.com
Family-run businesses are like elastic bands—they can be stretched only so far, in different directions, before tensions cause them to snap. Those who run family businesses know that stress can often be elevated by forces that don’t exist in non-family firms, from hiring obligations and bloodline silos to next-generation financial demands to under-performing family members. It’s one thing to discipline or even fire a stranger, quite another to turf a brother or daughter. For such businesses, finding a successful balance is an ongoing challenge.
So how can family-owned businesses avoid conflict and focus on growth? For a number of years I’ve been working with a company run by three brothers, each with their own family and their own unique take on strategy and succession planning. They have benefited tremendously by learning and practicing what I call the four Cs of strategy execution for owner-managed businesses:
Shield Insurance Proceeds from U.S. Estate Tax
Life insurance can play an important role in estate planning. But complexities arise for those subject to U.S. estate tax.
While life insurance proceeds are generally not taxable in the hands of a beneficiary, U.S. law includes the value of life insurance in the gross estate of the deceased if he or she owned the policy. Factors used to determine ownership include who can cancel or make changes to the policy’s terms, who is paying the premiums, and who can leverage the policy for investment purposes.
If a client has life insurance in her taxable estate, it can mean paying U.S. estate tax when none would otherwise be due. Consider an example of an unmarried U.S. citizen with a net worth of $5 million in real estate and investments. If that person were to add a $1-million life insurance policy, its inclusion in the gross estate would push the estate’s value beyond the current exclusion amount, and result in approximately $264,000 in tax. Here’s why, and what you can do about it.
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What’s your property risk exposure?
You’re building a $22-million house in Vancouver. You’re a little paranoid, so you’ve put hurricane-proof glass in the windows and specified that all the walls must be at least two feet thick. It seems you’ve thought of everything.
Fast forward to two months before move-in date. The contractors are finishing the hardwood floors, and the solvents catch fire. While everyone gets out safely, the house itself isn’t so lucky. Normally, firefighters would have doused the blaze quickly. But those windows and walls? Impenetrable. Even for the fire department.
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Protect your personal finances during divorce
By Carla Hindman, Director of Financial Education, Visa Canada
Divorce is often referred to as the No. 2 most stressful life event, second only to death of a spouse. And no wonder: Besides its obvious emotional impact, getting divorced can also be a financial nightmare as you’re forced to deal with nagging details like separating your finances, acquiring your own health insurance and deciding who will claim the kids as tax deductions.
Here are some of the many financial issues to consider when you separate – and to keep in mind even if your marriage is on stable ground: Read more 
