In our experience, the attorneys at Diamond, Polsky & Bauer have found that sometimes the hardest decisions for business owners to make is how to involve their children in the business, and how to ultimately pass ownership of the business to the next generation. This becomes particularly difficult when businesses are owned by two or more siblings.
A large part of our practice is representing closely-held businesses, and we have learned many of the hard lessons regarding business succession planning. In addition to understanding the dynamics among family members, there are corporate law, income tax law and estate tax law implications to be considered.
Perhaps the most important lesson we have learned is that there needs to be communication among all of the business owners as well as the members of the next generation, whether they are involved in the business or not. Sadly, we have learned that many successful businesses do not survive the transfer to the next generation because proper planning was not put in place or was implemented too late.
Business succession planning can never start too early, and must be reviewed on a regular basis to ensure that the plan still meets the realities of the business and the family relationships. The principals of the business, the business’ accountant and insurance agent, as well as the attorney for the business, all need to be involved as part of this process. A proper plan must address all potential areas of trouble, including death, disability, divorce and disagreement among the principals. This plan must also be coordinated with the individual owners’ estate planning as well.
The attorneys at Diamond, Polsky & Bauer have counseled clients on these issues for over 40 years, and we consider this to be one of our areas of greatest expertise. We would be happy to assist you in addressing these needs for your business.