Having the majority of asset value tied up in a family business results in a higher level of risk for the business owner.  In order to temper this increased level of risk, various strategies can be utilized:

• Asset diversification outside of the family business.
• Hold passive corporate assets in investment holding company, so as not to expose these assets to the operating entity’s creditors.
• Increase the value of the business by the creation of succession strategies.
• Creation of procedures to reduce reliance on owner, ensuring that goodwill value is not personal, but business, and therefore stable.
• Life insurance on key personnel to provide cash on the individual’s death, thus reducing the impact.
• Funded buy-sell agreements to create liquidity for share value.
• Overhead disability insurance to ensure that overhead expenses can be met in the even of disability of the business owner or key employees.
• Non-director spouse should hold personal assets.
• Hold US operating entities in a separate company, so as not to expose Canadian assets to US litigation.