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Wed
24
Sep
2008

Working with Family Businesses (Succession Planning)

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No votes yet
When working with a family business to facilitate the succession planning process how are you able to determine where a family is currently? (Retirement and Invesment Planning, Communication, Estate Planning, Retention of Key non-family employees, Leadership Development, etc.) Has anyone found a tool to assess these areas in a time-efficient manner that includes multiple generations in the conversation? I've searched high and low for a tool and finally I created my own (The Family Business Continuity Audit). I'm interested to see what others are doing in this area. Dave Specht
Wed
15
Oct
2008
39
points
#2 by Adrian Powell    

Working with Family Businesses

The only way that I am aware of to get this information is to talk to the principals, find out who their other advisors are, review plan documents (if extant) and when they were last updated and finally, determine who is supposed to do what when the transfer is effected.

Often, what a client THINKS he has in place is a far cry from what is actually there.

Thu
23
Oct
2008
35
points
#1 by William Murphy    

Succession Planning- Family Businesses

Every family business at some point has met with and works with several trusted advisers that all claim to do the same work- insurance agents, financial planners, accountants, attorneys. My first concern is that owners may have some of the ingredients completed, such as estate planning, wills, trusts, pension plans, business agreements, etc. However, if there is no coordination where all advisers work for a common goal, even though each adviser has the clients best interest in mind....its these situations that cause the future vacuum of problems...or that may lead to sudden (before retirement) events caused by death and/or disability.

There are only four sections of financial planning that a business owner will encounter: Accumulation planning (income tax and investment plans); Businesss Continuation Planning (what happens when someone retires, becomes disabled or dies); Estate Planning (involves wills, trusts and maybe gifting programs); Fringe Benefit Planning (pensions plans, group insurance, non-qualified deferred compensation). I find that it is rare that all four areas are coordinated the way they should.

Without a long drawn out detail, owners may have had one idea about what they wanted to do some years ago, however, with multiple changes (i.e. appreciation of business interest, changes in tax laws, the economy, etc) it maybe that retirement and succession does not follow the timeline once prepared for.

As a wealth management adviser, I look at a given situation knowing that present relationships with advisers need not be replaced, just coordinated. Having a quarterback with a 1000 foot view with the capability to use technology and complex planning wiil help correct a difficult situation (or answer questions) once there is acceptance from the principles AND their advisers. The need for an annual review usually eliminates unanswered questions and concerns and keeps the plan on track during tax law/personal/professional changes and needs.

If I can assist with a given situation, even if it is to answer some of these situational concerns, please contact me via the office number in my profile.

-Bill

"You never stand so tall when you stoop to help a child."