Estate Planning In North Dakota

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Overview of Planning

Individuals are frequently encouraged to plan. This page defines four types of planning: business planning, transition planning, retirement planning and estate planning. Each type of planning is distinct, but in the "real world", they often are intertwined to the point where it is difficult to distinguish among them.

 

Individuals are frequently encouraged to plan, whether it is to plan their estate, plan the operation of their business, plan for their retirement, or develop a plan for various other reasons.  This page defines four types of planning:  business planning, transition planning, retirement planning and estate planning.  As discussed in subsequent sections, these types of planning are distinct from one another, but they overlap and often are intertwined to the point where it is difficult, and perhaps unnecessary to distinguish among them.

 

  • Business planning can be described as short and long term planning in which business owners envision how they will operate their business to reach their goals; questions such as what and how to produce, how to market, how to finance the operation, and similar questions are addressed in developing a business plan.
  • Transition planning involves creating a vision for transferring ownership and management of a business, as well as transferring ownership of the business assets from the current owner(s) to a new owner(s).  The transfer of ownership and management of a closely-owned business often occurs over time, rather than as one immediate transaction.  The process of transferring ownership and management, the timing of the transfers and other details often are considered in developing a plan to transition a business from the current owner(s) to new owner(s).
  • Retirement planning considers how a person will bring their working career to an end and plan how they will use their time and manage their assets now that they are no longer pursuing a career or operating a business.  Whether there will be adequate income on which to retire is one of many questions often considered by persons who are preparing for retirement.
  • Estate planning is developing a vision for how one's affairs will be finalized at the time of their death.  Identifying heirs, providing for survivors, and managing taxes often are goals addressed in an estate plan.

These four types of planning can be unrelated; for example, a business owner often develops a business plan even though the owner is not intending to transfer ownership or retire.  Likewise, a person can plan for their retirement even though they correctly assume their life may not end soon.  Similarly, an individual can transition from their current business -- not to retire, but to pursue an alternative career or business.

However, the four types of planning are frequently intertwined.  For example, a business owner may be interested in developing a vision for transitioning the business to other owners as a step toward retirement.  At the same time, the current and new owners need to develop and pursue a business plan to assure the business continues to be profitable and meets the owners' objectives.  Likewise, the business owner may consider what would happen to the business assets if the owner dies before the business is fully transferred to the new owners; such as, how might a change in asset ownership impact the opportunity for the new business owners to succeed.

This web site addresses each type of planning.  The discussion then focuses on how individuals may approach coordinating these different planning efforts.  The web site also considers commonalities among the individual planning processes, such as goals, communication, and similar topics.

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