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Estate/Succession Planning for Business Owners

As a business owner you already bear a lot of responsibilities and challenges to succeed in a tough, competitive environment. You're focused on getting the work in the door, getting it done, getting paid, paying your bills and trying to grow your business from month to quarter to year.

You've probably spent at least some time considering the long term plan. Maybe you ponder selling your business one day to an outside buyer to fund your retirement. Or, possibly your children work in the business and you wonder if it could become a multigenerational business. But the relentless daily demands always push the future planning into the "to deal with someday" drawer.

The failure to create and implement a comprehensive succession plan is one of the primary reasons that only a small percentage of Canadian private businesses succeed into the second generation and a far smaller percentage successfully pass to the third.

It shouldn't be that way. And it doesn’t have to be.

Business succession planning is not simple or easy, but, it is a critical necessity, both for you, as the business owner, and your family. A complete succession plan starts with you and depending on circumstances, your family. What do you want to do with your business? Do you have children who want to take it over? Are they capable? How do you deal fairly when one child wants the business but the other(s) may not? How will the transfer to your child or children take place? How do you get your investment out? How can you reduce taxes? If the business is to be sold to an outside buyer, is it ready for sale? How do you know? What can you do to increase the attraction of your business to an outside purchaser?

The plan must be tailored to the specific circumstances and requirements of the owner, his family, the type of business and much more. It must ensure that tax considerations, estate concerns, shareholder issues, family law concerns and family harmony are all addressed. The plan must consider the unexpected death of the owner. Adequate liquidity for the plan's success must also be built in.

A comprehensive business succession plan may incorporate specially drafted wills and powers of attorney, shareholder agreements, family trusts, matrimonial agreements, life insurance trusts or designations and other legal documents. All documents must be specifically tailored to mesh together to ensure the smooth, economical and tax-effective transfer of your business in almost any circumstance.

The end goal of Keyser Mason Ball’s Estate and Business Succession Services Group is for our clients to achieve their business objectives, and we emphasize advice and planning in order to do so. We will work with your accounting and tax experts to help you create and implement a plan that meets your needs.

If you would like to know more about this topic or other issues in estate planning, please visit the other information links for our Estate and Business Succession Services Group. Or if you require advice or guidance regarding your duties as an Estate Trustee, call us and make an appointment with one of our lawyers in this Group. We look forward to hearing from you.

Contact:

Daniel C. Barichello dbarichello@kmblaw.com

Suzanna Winsborough swinsborough@kmblaw.com