Incorporating Your Business into Your Estate Plan: A Step-by-Step Guide

As a small business owner or entrepreneur, you have invested time, energy, and resources into building a successful business. But have you considered how your business fits into your broader estate plan?

Many business owners overlook the importance of integrating their business into their estate plan, which can lead to complications and uncertainties down the road. In this step-by-step guide, we will explore practical steps and considerations to help you integrate your business seamlessly into your estate plan.

Understanding the Importance of Estate Planning for Business Owners

Bringing your business into your estate plan is crucial for several reasons. Firstly, it ensures a smooth transition of ownership and management in the event of your incapacity or passing. By clearly outlining your wishes and intentions in your estate plan, you provide guidance to your loved ones and prevent potential disputes.

Secondly, it allows you to minimize tax liabilities and maximize financial benefits for both you and future generations.

Lastly, it provides peace of mind, knowing that your hard work will continue to benefit your family and legacy.

Step 1: Evaluate Your Business Structure

The first step is to evaluate your business’ current structure. Do you operate as a sole proprietorship, partnership, or corporation?

Each structure has different implications for succession planning, taxes, and liability protection. Consider consulting with a legal professional specializing in business law or your accountant to ensure you choose the most suitable structure for both your business and estate planning needs.

Step 2: Identify Key Assets and Liabilities

Next, identify the key assets and liabilities of your business that need to be addressed in your estate plan.

This includes tangible assets such as real estate, equipment, inventory, as well as intangible assets like intellectual property rights and customer contracts. Additionally, consider any outstanding debts or obligations your business may have. By understanding the value and nature of these assets and liabilities, you can make informed decisions regarding their distribution and management in your estate plan.

Step 3: Determine Succession Planning Strategies

Succession planning is a critical aspect of business planning, period, but it’s also important to consider for your estate plan.

Who would you like to take over the management and ownership of your business when you are no longer able to do so? This may involve grooming a family member or key employee for leadership roles, selling the business to a third party, or creating a trust to hold and manage the business assets on behalf of your beneficiaries. Each option has its own advantages and considerations, so it’s essential to carefully evaluate which strategy aligns with your long-term goals.

Step 4: Consult with Legal and Financial Professionals

Integrating your business into your estate plan requires expertise in both legal and financial matters. Seek guidance from professionals experienced in estate planning, such as lawyers specializing in business succession and accountants familiar with the intricacies of small business ownership like the team at Avisar.

These professionals can help navigate complex legal requirements, ensure compliance with tax laws, and provide personalized advice tailored to your specific circumstances.

Step 5: Update Your Estate Planning Documents

Once you have assessed your business structure, identified key assets and liabilities, determined succession planning strategies, and consulted with professionals, it’s time to update your estate planning documents accordingly.

Review your will, trusts, power of attorney designations, and any other relevant documents to ensure they reflect your intentions regarding your business. Be sure to clearly specify how you want your business to be managed and transferred after your passing or incapacity.

Considerations for Family-Owned Businesses

If you own a family-owned business, additional considerations come into play when including it in your estate plan. Balancing the interests of multiple family members can be challenging, so open and honest communication is crucial.

Consider creating a family agreement that outlines the governance and decision-making processes for the business. This document can help prevent conflicts and ensure a smooth transition of ownership from one generation to the next.

Tax Implications to Consider

Incorporating your business into your estate plan involves considering various tax implications. Consult with a tax advisor to understand how different strategies may affect your estate and gift taxes, as well as income taxes for both you and your beneficiaries.

Explore options such as gifting shares of your business during your lifetime, utilizing trusts to minimize tax liabilities, or taking advantage of applicable deductions and exemptions.

Common Challenges and How to Overcome Them

Including your business in your estate plan may present some challenges along the way. One common challenge is ensuring fairness among heirs who are actively involved in the business versus those who are not.

Consider implementing mechanisms like buy-sell agreements or life insurance policies to equalize inheritances while preserving the continuity of the business.

Another challenge is maintaining confidentiality regarding sensitive business information during the estate planning process. Work closely with your legal advisors to protect trade secrets and confidential data while still achieving your estate planning objectives.

We explored a number of other potential challenges in our last post, which we’d recommend you also review when considering your estate planning.

Estate planning can be complex, but you don’t have to do it alone. Remember to consult with professionals specializing in business law, taxation, and estate planning to ensure that all legal requirements are met and that you make informed decisions tailored to your specific circumstances.

Book a free consultation with one of Avisar’s estate planning experts to get all of your questions answered.

With careful planning, you can leave a lasting legacy that continues to thrive long after you’re gone.

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avoid these 5 estate planning mistakes

Avoid These 5 Estate Planning Mistakes to Safeguard Your Business’ Future

In the world of business, planning for the future is crucial. One aspect that often gets overlooked by business owners is estate planning. It’s more than a legal formality—it’s a cornerstone of your business continuity.

Today, we will delve into some common pitfalls and misconceptions in estate planning to help you navigate this important aspect of your business and personal finances.

Pitfall 1: Procrastination

It’s easy to put off estate planning, especially when you are focused on running your business. However, procrastination can lead to serious consequences. Without a solid estate plan in place, your assets may not be distributed according to your wishes in the event of your passing.

Confront this challenge head-on by setting a timeline for your estate planning. Consult with a professional who understands the nuances of your business and begin crafting a comprehensive plan that addresses all contingencies.

Pitfall 2: Ignoring Business Ownership

Many small business owners fail to consider how their business ownership will factor into their estate plan. Whether you are a sole proprietor, in a partnership, or own a corporation, it is crucial to outline what will happen to your business assets upon your death or incapacitation.

In the case of a corporation, business owners often fail to consider how their shares will be allocated after they pass away, which can lead to conflict among survivors and potentially destabilize the business. To avoid this, your estate plan should clearly delineate business assets from personal ones and stipulate a clear transfer of ownership that aligns with your vision.

Work with an estate planner to establish whether a buy-sell agreement, trust, or another vehicle best suits your situation. Ensure this is reflected accurately in your will and communicated clearly to all stakeholders to circumvent any ambiguity.

Pitfall 3: Lack of Clarity in Beneficiary Designations

One common mistake in estate planning is not clearly designating beneficiaries for your assets. Without clear instructions, the distribution of your assets can become a complex and lengthy process.

Regularly review and update your beneficiary designations, particularly after major life events such as marriage, divorce, or the birth of a child. Your estate planning advisor can assist in ensuring these designations are consistent with your overall estate planning goals.

Pitfall 4: Overlooking Tax Implications

Estate planning is not just about asset distribution; it also involves understanding the tax implications of your decisions. Failing to consider tax implications can result in unnecessary tax burdens for your beneficiaries.

Seek out an estate planner with tax expertise or involve your accountant in the estate planning process. There are numerous strategies to mitigate tax exposure, such as trusts, charitable donations, or gifting strategies that can preserve more of your estate for your beneficiaries.

Pitfall 5: DIY Estate Planning

While DIY solutions may seem cost-effective, estate planning is a complex process that requires professional guidance. Templates and online tools may not account for the nuances of your specific business and financial situation.

Rely on the expertise of qualified estate planning lawyers who can tailor solutions to your specific circumstances. The investment in professional advice will pay dividends in ensuring your estate plan is comprehensive, legally sound, and truly reflective of your intentions.

Securing Your Legacy with Estate Planning

Estate planning isn’t merely about drafting documents; it’s about securing the future you envision for your business and your loved ones. Each pitfall avoided is a step towards that security, a reinforcement of the fortress that protects your legacy. Begin the journey today—it’s one of the most profound acts of stewardship you can perform for the business empire you have built and the people who help sustain it.

As you move forward, remember that estate planning is an ongoing process. It evolves as your business and personal circumstances change. By staying vigilant and proactive, you ensure that your business’s future—and your legacy—remains fortified for years to come.

Avoid common estate planning mistakes that can jeopardize your hard-earned success by booking a free consultation with one of our estate planning experts. We are here to help you make informed decisions and secure a prosperous future for your business and your family.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

cash flow management is critical for your business

Cash Flow Management: Mastering the Lifeline of Your Business

In a world where nearly 82% of businesses falter due to poor cash flow management, understanding this vital aspect is not just important—it’s your lifeline. Mastering cash flow management can mean the difference between thriving and merely surviving.

Imagine navigating a ship through unpredictable seas. Without a clear understanding of your position and the elements at play, the journey becomes perilous. Similarly, without a firm grasp on cash flow, your business may struggle to reach its destination: success.

Understanding Cash Flow: The Bedrock of Business Health

At its core, cash flow represents the movement of money in and out of your business. It’s a real-time snapshot of your financial health, showing how well you’re managing your resources. Understanding cash flow goes beyond merely observing the numbers; it involves deciphering what those numbers say about your operational efficiency, your ability to meet obligations, and your potential for growth.

Cash inflow is the lifeblood of your business, pumped in through sales, accounts receivable collections, and any other sources of income. Conversely, cash outflow is the expenditure tide, flowing out for expenses such as rent, payroll, inventory purchases, and other operational costs. The equilibrium between these two streams dictates the financial health and stability of your business.

Profit vs. Cash Flow: A Critical Distinction

A common misconception among business owners is equating profitability with healthy cash flow. A business can be profitable on paper yet struggle with cash flow.

Profit, or net income, is a measure of what remains after all expenses are subtracted from revenue over a certain period. Cash flow, on the other hand, is about the actual amount of money available at any given time. For instance, sales made on credit contribute to profit but not to immediate cash flow, highlighting the potential for discrepancies between the two.

The Significance of Cash Flow Statements

Understanding cash flow necessitates familiarity with cash flow statements, a financial document that breaks down the cash generated and used by a business over a period. This statement is divided into three main parts:

  • Operating activities (day-to-day business operations)
  • Investing activities (purchases and sales of long-term assets)
  • Financing activities (loans, dividends, and equity)

A well-maintained cash flow statement not only offers a snapshot of the business’s liquidity but also provides insights into its operational efficiency, investment strategies, and financial health.

In essence, mastering cash flow management empowers you to make informed decisions, anticipate future financial needs, and navigate the challenges of business operations with confidence. It enables you to ensure your business remains solvent and can sustain growth over the long term.

The Impact of Poor Cash Flow Management

Neglecting cash flow management can have dire consequences. A study by U.S. Bank found that 82% of business failures are due to poor cash management. Without a vigilant eye, you might not see trouble brewing until it’s too late. Inadequate cash flow management can lead to:

  • Inability to meet financial obligations on time
  • Compromised business relationships and creditworthiness
  • Hindered growth due to lack of funds for reinvestment
  • Increased stress and potential for business failure

Measuring and Analyzing Cash Flow

To steer your business towards success, you must first learn to measure and analyze your cash flow accurately. This involves:

  • Understanding cash flow statements: Learn to read and interpret cash flow statements, which detail the cash generated and used during a specific period.
  • Identifying cash flow trends: Look for patterns in your cash flow over time. Are there seasonal fluctuations? Are certain products or services more profitable?
  • Benchmarking against industry standards: Knowing where you stand in comparison to industry averages can provide valuable insights and highlight areas for improvement.

Tips for Improving Cash Flow Management

Improving cash flow management is a multifaceted approach that involves both strategic planning and practical actions:

  • Invoice promptly and follow up: Delayed invoicing leads to delayed payments. Develop a system for timely invoicing and follow-up on overdue accounts.
  • Optimize inventory: Excess inventory ties up cash. Use inventory management tools to maintain an optimal inventory level, reducing waste and freeing up cash.
  • Negotiate better payment terms: Work with suppliers to negotiate payment terms that align with your cash flow cycle, possibly extending payment periods.
  • Leverage technology: Implement accounting and cash flow management software to automate and streamline processes, providing real-time insights into your financial status.
  • Manage expenses: Regularly review and categorize expenses. Identify areas where costs can be reduced without impacting quality or productivity.

Implementing a Cash Flow Management System

A structured cash flow management system is crucial for maintaining control over your financials. This involves:

  • Regular cash flow forecasting: Anticipate future cash flow with forecasting based on historical data, current trends, and expected changes in the market.
  • Setting cash reserves: Establish a safety net of cash reserves to buffer against unforeseen challenges.
  • Creating actionable policies: Develop clear policies for payment terms, credit control, and expense approval to ensure consistency and discipline in cash flow management.

Advanced Cash Flow Management Strategies

For businesses looking to take their cash flow management to the next level, consider these advanced strategies:

  • Dynamic discounting: Offer early payment discounts to customers for quicker cash turnaround.
  • Supply chain financing: Utilize third-party financing to pay suppliers early at a discount, improving supply chain efficiency and maintaining cash flow.
  • Cash flow analysis tools: Invest in advanced analytics tools to gain deeper insights into cash flow patterns, enabling more informed decision-making.
  • Leverage Financing Options Wisely: Consider lines of credit, invoice factoring, or other financing solutions to manage short-term cash flow needs without compromising long-term financial health.


By understanding and effectively managing your cash flow, you’re not just surviving; you’re thriving, ready to seize opportunities and navigate challenges with confidence.

Remember, effective cash flow management is an ongoing process. It requires vigilance, adaptability, and strategic foresight. By implementing the tips and strategies discussed in this post, you can ensure your business not only survives but thrives in the competitive marketplace.

Book a free consultation to learn more about how to use solid cash flow management to run your business.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein. Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

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How Do I Make a Payment to the CRA?

One of the most common questions we hear from our clients is “how do I make a payment to the CRA?”

The Canada Revenue Agency (CRA) offers a number of options for making payments, allowing you to choose the payment method that best suits your immediate needs. In the past, the only options available to taxpayers (individuals or businesses) would have been to use a remittance form provided by CRA to pay at the bank teller or by mail through Canada Post.

The remittance forms had magnetic ink encoding so the payment would be applied to the correct taxpayer and tax year. These old-school remittance forms are still provided by CRA but only by special request as they are intentionally moving toward more electronic options. Even though we all know change can be hard, we believe these new options are actually easier for taxpayers.

Electronic Payment Options for The CRA

The two most common electronic options are making payments using your financial institution’s online banking bill payment service or via CRA’s My Payment service.

Payment using online banking is as simple as setting up a new payee, like a utility bill or credit card. For individuals, you simply enter your SIN for your account number and select the payment option (e.g., payment on filing, arrears balance or installment).

Businesses typically have to select “Business Tax Payment” or a similar option within bill payments to get to the CRA payments. Once there, you select the type of payment (GST, corporate tax or payroll).

Most banks also allow you to file your GST or payroll remittance at the same time as payment.

CRA’s My Payment service has been around for a number of years and accepts Interac Debit, Visa Debit or Debit Mastercard payments. It uses the same login information as your online banking account (so you don’t have to remember another dreaded password). Unlike online banking which can take a day to process, with My Payment you get an immediate confirmation, great for those last-minute tax payments. Important note: credit card payments are not accepted through the My Payment service.

The steps for My Payment are very similar to online banking: first, select your payment type, account number, payment period and amount. Once you are happy with the payment to be made, confirm and click “Pay Now” to proceed to select the bank to pay from.

Did you know that you can set up pre-authorized debit (PAD) payments to CRA? PAD payment agreements can be set up for a one-time payment or for a series of payments (like installments). You can create a PAD payment agreement in your CRA My Account or by asking that your electronic filer completes and files form T185, Electronic Filing of a Pre-authorized Debit Agreement.

Of course, we would be remiss if we left out credit card payments, we all love the points! The option is available, but it’s not free. Two third-party providers, PaySimply and Plastiq, accept credit cards for a fee of about 2.5%.

In-Person Payment Options for the CRA

You can make a payment to CRA by visiting your Canadian bank, financial institution, or credit union, if you have a personalized remittance voucher. Personalized remittance vouchers can be requested through My Account or by calling the appropriate general enquiries line 1-800-959-5525 (Business) or 1-800-959-8281 (Individual). For individual taxpayers only, your tax return preparer may be able to print a personalized remittance voucher that can be used to make your tax payment in person via cheque or debit.

CRA’s newest payment option allows you to pay in person with cash or debit at any Canada Post outlet across Canada using a QR code that contains information that allows CRA to credit your account. Personalized remittance vouchers from CRA or from your tax return preparer will already contain this QR code. If you do not have a personalized remittance voucher, you can create a QR code at Service fees for Canada Post payment services range from $3.95 – $7.95 and are dependent on the amount of the payment.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.