jfoxcpacfpModeratorStatus: Financial Advisor, Accountant, Small Business OwnerPosts: 8130Joined: 01/09/2016
Do business owners include their business value in NW calcs?Click to expand…
That is an excellent question. Definitely, they should. The intrinsic value of a business is part of the retirement plan for many business owners. Those who plan to walk away (i.e. have no succession plan) should not include the value in their net worth, as there is none. But I always recommend that small single owner businesses have a succession plan in place via grooming successors. Not easy and really requires planning ahead but definitely a valuable exercise.
Partnerships should have a buyout calculation in the partnership agreement, making valuation easier. This is one of the few areas that cash value life insurance can make sense.