Dan and Judy Cohen
52 year old business owners
“We know how to make money. We’ve worked hard and built a successful business. At some point we want to sell but in the meantime we have excess cash that we want to invest for retirement. We’re not looking for anything fancy, just solid, conservative growth … and don’t lose our money”
Dan and Judy Cohen started a plumbing supplies company 25 years ago and have grown it from a two person operation to a rapidly growing business that employs 16 people. Originally they rented space in a building owned by Judy’s father in North York. They have since bought an industrial building just north of the city worth approximately $2.5 million.
The Cohen’s own a home in North York and a cottage in Muskoka. They have no debt. They still love to go to work and do not foresee retiring for at least 10 years. However, they are getting a bit tired of the cold winters and wouldn’t mind spending some time in Florida. In the summers, the entire family enjoys the cottage.
They have three children, Jacob (25), Dave (23) and Amy (19). Jacob completed a computer science degree and has started his own I.T. business. Dave lives at home and is in his second year of law school at Osgoode. Amy is in second year science at Western University. She is considering medicine or dentistry as a profession.
What keeps them up at night?
- Debating whether or not to move
- Considering buying a home in Florida
- Concerns about employees
- Realizing that they have not made any transition plans
Wyndham created the following solutions for Dan and Judy:
- Created projection of funds needed to support Judy and Dan through retirement starting in 10 years. Estimated the annual savings required to accomplish this goal.
- Developed a comprehensive investment strategy using various registered, non-registered and corporate accounts. After assessing the Cohen’s risk tolerance, cash flow, tax situation and projected retirement needs, we were able to select the appropriate asset allocation and investment choices.
- Reviewed their company’s corporate structure. Suggested the use of a holding company for investments. Advised on using different shareholder classes to distribute dividends to their children in a tax efficient manner. Provided contacts for lawyers well versed in small business reorganizations.
- Discussed pros and cons of purchasing a property in Florida. Gave our opinion on different ownership structures if they decide to invest in a U.S. property. Referred to several knowledgeable cross border lawyers for recommendations.
- Explored business expansion and employee issues. Gave contact information to several experienced employment lawyers if they wish to discuss employment contracts for staff.
- Evaluated their insurance coverage and recommended business overhead expense insurance for their growing company. Also discussed key person insurance for one essential salesperson who is responsible for many of their new accounts.
- In conjunction with their accountant, devised a transition framework to sell their business in 10 years. This plan will be reviewed annually and initiated in 6 years.
What Dan and Judy appreciated from their experience
- Knowledge and expertise in dealing with multiple concerns.
- Diligence in providing detailed options so they could choose the path most comfortable for them.
- Identification of and proactive planning for future events.
- Trustworthiness, confidentiality and prompt attention.