What I Do
Transition planning is the process of preparing for the transition of ownership of a business, either to the next generation, a management team or an outside buyer. In the process you need to confront yourself, your family and your business, begin a dialogue and be open to where it leads you.
The process requires input from various stakeholders linked to family enterprises – you, your spouse, your children, whether working with you in the business or not, your management team and your trusted advisors.
It’s not enough to create a succession plan and an estate plan that are tax efficient. It needs to start by being people efficient. There is a good reason why more than 70% of family owned businesses don’t make it to the next generation. Succession plans don’t work on the basis of one size fits all. Each family enterprise is unique. Its vision is unique. Its family dynamics are unique. Each family member’s perspective deserves and needs to be acknowledged and respected, but first and foremost, it needs to be expressed. Silence is the great destroyer of wealth in a family business.
As a lawyer and a family business advisor, I believe that my clients are not properly served unless I understand the whole story, so the first step in my process is information gathering. Founders share their story of the development and growth of the business, its current challenges and opportunities, and family members share their individual perspectives with me on a confidential basis. Objectives and issues begin to emerge that help shape the context of further discussions among the family members in facilitated forums that I direct. The insights that I gain in the information gathering process give me valuable tools to focus and manage the dialogue. Other trusted advisors, such as accountants, insurance advisors, valuators, family wealth planners are brought into the dialogue in a collaborative undertaking, as and when appropriate.
The objective is to create an ownership transition plan and an estate plan that implement the founder’s and the family’s goals and, to the greatest extent possible, has the endorsement of each of the members of the family. The next task is to give these goals and objectives expression in shareholder agreements and family constitutions; to design tax efficient corporate reorganizations through estate freezes, family trusts and other vehicles that look to marrying family objectives with taxsmart strategies; and to implement complementary estate planning through wills and other instruments.
In a recent survey, family business owners were asked to rank the things that were most important to them in their business. It was not tax planning, marketing strategy, management models or other pragmatic implementation tools, but peace and harmony in the family that was the overwhelming goal. I share that ultimate objective and it drives my approach to working with families in business.
