Good Work in Isolation

I was sitting down with a new client recently — sharp guy, growing business, only a couple years in and already generating real retained earnings. Good problem to have.

But within those two years he’d already had to restructure his corporation once. Not because anyone did anything wrong. Because the structure he started with was built for where he was on day one — not where he was going.

It’s a story I’ve heard more times than I can count.

You start a business. Things start moving. Someone tells you to incorporate so you call a lawyer. The lawyer puts together a corporation — and they do exactly what you asked. The problem is you were too busy to think through the full picture, and the lawyer wasn’t looking at growth, estate planning, income splitting, or how you’re eventually going to get money out of that company. They built what you needed that day.

Fast forward a year or two and the business looks nothing like it did at incorporation. Revenue is up. Retained earnings are building. Maybe a spouse or family member should be involved. Maybe there are tax strategies sitting on the table that the current structure can’t access. Maybe the way funds are going to come out of the corporation down the road hasn’t been thought about at all.

The structure that got you here isn’t always the structure that gets you to what’s next.

This is one of the most common gaps I see with founders — not because their accountant or lawyer isn’t good at their job, but because nobody is looking at the whole picture at the same time.

The lawyer builds the structure. The accountant handles the returns. But the lawyer isn’t thinking about what the accountant knows, and the accountant isn’t thinking about what the estate plan requires. Everyone is working in their lane.

Nobody is standing back and asking: given where this person is actually going, is any of this still set up right?

With this client we’ve just completed a restructure and we’re now working with his accountant and his lawyer together — not separately — to make sure the foundation is built for today, for what the next five years looks like, and for how he eventually transitions wealth out of the business and into the rest of his financial life.

It’s not complicated work. But it only happens when someone is paying attention to the whole map.

If the answer is the latter, it might be worth finding out what’s changed since then.