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When a Partner Dies, the Business Can Die Too—Unless This Is in Place

by Eric Seyboldt, MBA

A thriving business can be undone not by competition, recessions, or bad strategy, but by a single legal silence. When ownership rights are not spelled out, state law often fills the gap—and it does so with blunt instruments. In many jurisdictions, if a business partner dies without a binding succession plan, the ownership interest can pass directly to the next of kin. Overnight, a carefully built enterprise can find itself co-owned by someone who never chose the risk, never learned the model, and may urgently need cash rather than long-term growth. That is not just a legal problem. It is an economic shock.

From an economic standpoint, this is a classic liquidity-and-control crisis. The surviving partner needs operational stability; the family of the deceased often needs immediate funds. Without a mechanism to convert ownership into cash, the business becomes the only ATM available. That usually means forced distributions, asset sales, or debt—each of which erodes enterprise value at precisely the wrong moment.

Consider a simple, real-world scenario. Two contractors build a profitable regional operation. Equipment is financed, crews are trained, and contracts depend on personal relationships. One partner dies unexpectedly. His spouse inherits the ownership interest. She has no interest in running a construction firm, but she does need income to replace her husband’s paycheck. The surviving partner cannot afford to buy out half the company from retained earnings without gutting working capital. So trucks get sold, payroll tightens, and customers feel the instability. What began as a personal tragedy becomes a business spiral.

There is a straightforward, time-tested solution that aligns legal structure with economic reality: a properly drafted buy–sell agreement, funded with life insurance.

A buy–sell agreement is not boilerplate paperwork. It is a private market created inside the company. It sets the trigger events (death, disability, retirement, or voluntary exit), the valuation method, and the obligation to buy and sell. In economic terms, it eliminates uncertainty, reduces transaction costs, and prevents bargaining under distress—three of the most expensive conditions in finance.

But the agreement alone does not solve the liquidity problem. Funding is what turns a legal promise into a workable transaction. Life insurance provides immediate, tax-advantaged capital at the exact moment the business is least able to generate it. Instead of draining operating cash or borrowing at unfavorable terms, the policy proceeds finance the buyout cleanly. The family receives fair value in cash. The surviving partner retains full control. The company continues to function without disruption.

Valuation is the third leg of the stool, and it is where many plans quietly fail. Businesses change. Revenues grow, margins tighten, new partners enter, others leave. A buy–sell agreement that reflects a valuation from ten years ago is not protection; it is an invitation to conflict. Regular updates—often tied to objective formulas such as EBITDA multiples or independent appraisals—keep expectations aligned with reality. Economically, this preserves trust in the private market the partners created for themselves.

There are also structural choices. Cross-purchase arrangements, entity-purchase agreements, and hybrid models each have tax and balance-sheet implications. For smaller partnerships, cross-purchase is often clean and efficient. For multi-owner firms, entity-purchase structures simplify administration. The correct choice depends on size, growth trajectory, and capital needs—exactly the variables that professional financial planning is designed to evaluate.

The deeper point is not legal. It is economic. Businesses are fragile systems that depend on confidence—of employees, lenders, customers, and suppliers. Uncertainty about ownership fractures that confidence instantly. A funded buy–sell agreement is not pessimism. It is infrastructure, as essential as insurance on a factory or backup power for a hospital.

Household finances are tied to this as well. For families, the buyout proceeds often replace lost income, pay off mortgages, and stabilize college plans. Without it, surviving spouses may hold an illiquid asset they cannot manage and cannot easily sell. What looks like wealth on paper becomes stress in practice.

We’ve always understood something Wall Street sometimes forgets: good planning is not about predicting disaster; it is about staying standing when life changes fast. A business built with discipline deserves an exit strategy built with equal care.

The companies that last are not the ones that avoid risk. They are the ones that price it, plan for it, and refuse to let tragedy become a balance-sheet catastrophe. A single, well-designed structure can protect the company, preserve families, and keep livelihoods intact. That is not just good law. It is sound economics—and it is how responsible operators make sure tomorrow does not undo everything built today.

Reach out to us for a complimentary, 10-minute consultation call. Sound planning is not about predicting the worst—it is about building systems that keep families and businesses stable when life changes quickly. The right retirement strategy should protect income, preserve control, and ensure that hard-earned assets remain a source of security rather than stress. For a brief, complimentary 10-minute strategy call, contact Eric at 614-943-2265 or [email protected]. Decisions made with clarity today are what keep tomorrow from being decided by default.

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When Your Retirement Plan Works—But Your Retirement Doesn’t

by Eric Seyboldt, MBA

For most of a working lifetime, the rules were clear: contribute to the 401(k), take the tax deduction, reinvest the match, and do not touch the money. That discipline built substantial wealth for millions of households. Yet many families now approaching retirement are discovering an uncomfortable truth. They did everything right, and still find themselves short on flexibility, short on control, and facing financial decisions that feel far more complicated than they were led to expect.

On paper, these households are wealthy. In practice, much of that wealth is fenced in by age rules, tax rules, healthcare rules, and distribution requirements that shape behavior whether families like it or not.

Start with access. A household that wants to retire at 55 may have $1 million in a 401(k) and still struggle to create income without penalties until age 59½. Some workers qualify for the Rule of 55, but only if they separate from service in the right year and their employer plan permits it. Otherwise, early retirees must lean on taxable savings, home equity, or part-time income—not because they lack assets, but because the assets are in the wrong legal container for that stage of life.

Next comes taxation. Pre-tax accounts postpone taxes; they do not reduce them. Required Minimum Distributions begin later than they once did, but when they arrive, they arrive in full. Large balances produce large forced withdrawals, which stack on top of Social Security and investment income. It is not unusual to see a couple pushed from the low-20% tax brackets into the low-30% range just as they expected taxes to decline. At the same time, higher income can trigger Medicare premium surcharges that function like an additional tax on every extra dollar withdrawn.

Healthcare magnifies the problem before Medicare even begins. Marketplace insurance is affordable only within narrow income bands. A modest increase in taxable income can eliminate subsidies entirely, turning a $6,000 annual premium into $20,000 or more. That makes withdrawal strategy an insurance decision as much as a tax decision. One extra IRA distribution can ripple through both systems at once.

This is where the Roth conversion debate becomes unavoidable. Paying taxes today to reduce future required distributions can improve long-term outcomes, especially when conversions are done methodically over several low-income years. But large conversions can also push income into higher brackets and destroy healthcare subsidies in the near term. The correct strategy depends on life expectancy, market performance, state tax exposure, spousal benefits, and legislative risk. There is no generic answer—only better and worse trade-offs for each household.

Social Security timing raises the stakes further. Delaying benefits can produce substantially higher lifetime payouts, but only if households can fund the early years without inflating taxable income in damaging ways. For many families, claiming decisions are inseparable from tax planning, healthcare planning, and portfolio design.

From an economic perspective, the problem is not insufficient saving. It is over-concentration in accounts that defer taxes but restrict timing. When nearly all household wealth sits in pre-tax retirement plans, families lose the ability to manage income smoothly across retirement. They cannot control tax brackets, healthcare eligibility, or premium surcharges with precision. Liquidity and tax flexibility become just as important as market returns.

Strong retirement plans diversify not only investments, but access and tax treatment. That may include maintaining meaningful after-tax reserves, building Roth assets deliberately, coordinating withdrawal sequencing, and aligning Social Security strategy with healthcare and tax thresholds. The objective is not to chase higher balances, but to maximize lifetime spendable income after taxes and insurance costs—the number that actually determines financial security.

The hard truth is that retirement is not simply the reward for long-term saving. It is a second phase of financial management that requires as much planning as the accumulation years. Households that treat it that way gain options. Those that do not often discover that wealth, by itself, does not guarantee freedom.

A well-built retirement should feel steady and workable, not like a puzzle that changes the rules every year. When money is structured to support real-world living—not just account statements—retirement becomes what it was supposed to be all along: a time to use what was built, not wrestle with it.

Contact us for a complimentary, 10-minute estate planning consultation. Moving across state lines—or through life’s major milestones—deserves the same level of care and foresight as building your wealth in the first place.

Call Eric Seyboldt at 614-943-2265 or email Eric at [email protected] to schedule your free estate and legacy review. Because the plans that protect your family’s future are worth keeping as strong and up-to-date as the life you’ve worked so hard to build.

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Fixed annuities can be an essential component of a well-rounded retirement strategy, offering security, predictability, and efficiency in financial planning.

These are current fixed annuity rates and their durations from Top A-rated carriers (subject to change at any time, not FDIC insured):

Rates Are Dropping! Don’t Wait To Lock These Fixed Annuity Rates In Today!

3-year: 5.45% (under $100k Deposited)

3-year: 5.60% (over $100k Deposited)

5-year: 6.05% (under $100k Deposited)

5-year: 6.30% (over $100k Deposited)

7-year: 6.25% (under $100k Deposited)

7-year: 6.50% (over $100k Deposited)

Please feel free to call Eric at 614-943-2265 if you’d like to ask any questions or request information on these fixed annuities or other retirement topics that are on your mind.

REAL ASSETS, Invest Like the Ultra-Wealthy

Invest Like the Ultra-Wealthy: Why Smart Money Is Flocking to Real Assets Like Gold

Today’s retirement strategies were built for a different economy. Living costs rise faster than expected, markets move in sharper cycles, and monetary policy continues to reshape the value of cash and bonds. Relying solely on traditional investments leaves many portfolios exposed to risks that are largely outside an investor’s control.

That is why many disciplined investors are adding gold—not to replace growth assets, but to strengthen the foundation of their retirement strategy.

Gold has preserved purchasing power through inflation, currency shifts, and financial disruptions for centuries. It does not depend on corporate profits, central bank policy, or government balance sheets to retain value. And as a physical asset, it exists outside the financial system that governs most modern wealth.

This is not about chasing returns. It is about protecting what has already been built.

A well-designed retirement plan balances growth with durability. In uncertain economic conditions, gold provides stability that paper assets alone cannot.

When the goal is long-term security, not short-term speculation, resilience matters.

During market chaos, real assets don’t flinch. They thrive. History proves it. While equities tumble, hard assets often surge—shielding portfolios and delivering asymmetric returns when they're needed most.

And even in calm times? They add powerful diversification. That’s why the ultra-wealthy use them as a cornerstone—not a sideshow—in their wealth strategy.

Ask yourself:

🧠 Are you truly diversified?
🧠 What happens to your retirement if inflation stays elevated?
🧠 If the dollar weakens, what asset in your portfolio gets stronger?

If you don’t have a good answer, it’s time for a new conversation.

Allocating funds into the asset class known as “Real Assets” may be a strategy that you should consider.

Ask us how to Rollover a portion of Your IRA or 401k To a GOLD IRA (see link below) and:

• Safeguard your assets from the collapsing dollar

• Incorporate the ‘REAL ASSET’ class into your portfolio like the ultra-wealthy

• Hedge against the current high-inflation conditions

• Protect your retirement assets against economic crises

Just get in touch. We make it easier than ever.

Feedback or Questions?

You’re invited to get in touch with us if you’d like to find out how the Novus Financial Group can help you on your journey to a happy, fulfilling life in Retirement. 

Office: 614-943-2265

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Investment advisory services are offered by duly registered individuals on behalf of CreativeOne Wealth, LLC a Registered Investment Adviser.

The content we provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision. Also, note that every investment comes with its risks and drawbacks. Lastly, we would like to remind you that past results cannot guarantee future returns.

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