Business Succession Planning

Friday, February 25, 2011

Press Coverage of Estate Planning this Week (February 25, 2011)

Jeff Haden of BNET writes about the importance of business succession planning for the unexpected injury or illness of the business owner. Solutions to some of the more common problems include purchasing life insurance for liquidity purposes, ensuring the second in command has the necessary authority to make important business decisions if the need arises, and having a revocable living trust to ensure the business doesn’t end up subject to probate. See Today’s To-Do List: Create a Succession Plan for the Unexpected (Feb. 24, 2011).

Bernard A. Krooks of Forbes discusses how to plan for digital assets, including online financial accounts, merchant accounts, social networking accounts, and online storage of photos, among other things. Consider naming a “Digital Executor” who is comfortable with technology and inform them of the person or location that has a printout or flash drive containing your key information for accessing digital accounts. See Digital Estates: The New Frontier (Feb. 23, 2011).

Friday, September 10, 2010

Press Coverage of Estate Planning this Week (September 10, 2010)

Deborah L. Jacobs of Forbes lists some of the many problems that can go wrong with do-it-yourself estate planning, including ambiguity leading to court battles, forfeiture of estate tax breaks costing millions of dollars, and the wrong people inheriting your assets because of missing language. See The Case Against Do-It-Yourself Wills (Sept. 7, 2010).

Gary Brooks writes in The News Tribune (Tacoma, Wash.) that small business owners should have an exit plan that follows one of three strategies: identifying and grooming a successor; preparing for acquisition by a third party; or engaging in a managed wind down of the business. Too often, however, small business owners don’t plan ahead and a default fourth approach is required: closure and liquidation of business assets. See Exit Plan a Crucial Aspect to Small Business Ownership (Sept. 3, 2010).

Friday, March 19, 2010

Press Coverage of Estate Planning this Week (Mar. 19, 2010)

Paul Sullivan of the New York Times writes about incorporating strategies to deal with state estate taxes into your estate plan. Two issues to watch for are the use of formula clauses and qualified terminal interest property (QTIP) trusts. Some states allow a separate QTIP election from that made on a federal return, other states do not. See No Federal Estate Tax, But What About Your State? (Mar. 11, 2010).

Donald J. Korn of Investor’s Business Daily discusses the importance of a financial power of attorney as part of your estate plan, and provides some advice on who to pick as your agent, who to give the document to, and how to improve the odds that your financial institution will accept yours. See Don’t Let Power of Attorney Fool You (Mar. 12, 2010).

Ian Mount of the New York Times provides advice on how to prepare a family business for the next generation, including identifying successors, grooming the new leaders, retaining key employees and minimizing tax liabilities, among others. See How to Prepare Your Business for Succession (Mar. 17, 2010).

Friday, November 13, 2009

Press Coverage of Estate Planning This Week (November 13, 2009)

Victoria E. Knight of the Wall Street Journal writes that a weak economy makes for a bad time to sell a family company, but a good time to pass it on to the next generation. Several methods involve freezing the value of the business at today’s trough in the business cycle. See Wealth Transfers for Family Businesses (Nov. 9, 2009).

Daniel O. Tully, Esq., writes in the Bristol Press (Bristol, Conn.) about some of the fundamental differences between wills and trusts. See Senior Signals: Difference Between Will, Trust (Nov. 8, 2009).

Bob Carlson of KCI Investing discusses what recipients should know about inherited IRA’s. The rules are not complex, but neither are they obvious. And mistakes can be needlessly costly. See What Your Heirs Should Know About IRAs (Nov. 12, 2009).

Arden Dale of the Wall Street Journal writes that converting a traditional IRA to a Roth IRA can make sense even for people in the 60s and 70s, particularly where the goal is to transfer wealth and not just shelter money from taxes. See Roths as Tools for Wealth Transfer (Nov. 10, 2009).

Friday, September 18, 2009

Press Coverage of Estate Planning This Week (September 18, 2009)

Jon Tevlin of the Star Tribune (Minneapolis, Minn.) recounts a cautionary tale of misapplied trust in naming an agent on a power of attorney for finances to manage funds for an adult with autism.  When naming a power of attorney for finances, choose someone whose trustworthiness is beyond doubt.  See What Happened to a Vulnerable Man’s Money? (Sept. 12, 2009).

Nolan Baker and Mark Clair write in the Toledo Free Press on the importance of planning when you have a blended family.  If you are not careful, your children could be left with no inheritance.  See If You Re-Marry, Make Sure to Protect Your Children (Sept. 18, 2009).

Charles Ross of the St. Louis American lists several problems with the probate process that many people would prefer to avoid, including delays in receiving an inheritance, costs of going through probate, and the lack of family privacy.  See What Are the Pitfalls of Probate? (Sept. 18, 2009).

James P. O’Malley writes in The Ledger (Lakeland, Fla.) about how too many family businesses fail after the first generation, and how to prevent that from happening to you. His advice includes writing a buy-sell agreement, gifting the family business to the next generation to reduce estate taxes, and most importantly, starting the planning process now instead of putting it off.  See Working on Your Estate Plan Now Will Pay Off Later (Sept. 14, 2009).

Michaela Cavallaro of Dow Jones Newswires recounts how an Irrevocable Life Insurance Trust paired with creative funding mechanisms to pay for a new insurance policy allowed an elderly widow to save her beneficiaries a big chunk of her estate from estate taxes.  See A Sophisticated Solution to a Tax Issue (Sept. 15, 2009).

Friday, August 28, 2009

Press Coverage of Estate Planning This Week (August 28, 2009)

Kelvin Collins of the Better Business Bureau of Central Georgia writes in the Augusta Chronicle that the Better Business Bureau advises consumers that if they own something of value that they would like to pass on to loved ones at their death, they should create an estate plan. He provides and overview of the basic estate planning documents and provides tips on communicating with family members about the plan. See Estate Planning Assures Control of Your Assets (Aug. 24, 2009).

LaTina Emerson of the Augusta Chronicle recounts how procrastinating on an estate plan can lead to problems in families of all types. She states that parents should start planning as soon as they have children to determine who would raise the children and manage the family's money in a worst case scenario. See Estate Planning Can Prevent Family Feuds (Aug. 23, 2009).

Kevin Reardon of BizTimes (Milwaukee, Wis.) suggests that business owners ensure they have a business exit plan if retirement is near, and review it regularly in light of the current economy. He recommends key questions every exit plan should address and questions that business owners should be discussing with their family. See Business Exit Plan Should Be Reset in Tough Economy (Aug. 21, 2009).

Friday, July 31, 2009

Press Coverage of Estate Planning This Week (July 31, 2009)

Taylor Smith of Dow Jones Newswires writes about using college savings plans, known as 529 Plans, as an estate planning tool where children or grandchildren anticipate attending college or graduate school. It is possible to front load these plans up to five years in advance, so you can quickly get a lot of money out of your taxable estate.  See Using 529s for Estate Planning (July 24, 2009).

Peg Eddy writes in the San Diego Daily Transcript about the need to ensure financial stability for a departing business owner when crafting a business succession plan.  If the owner's financial future remains uncertain, any number of stumbling blocks may arise that prevent a successful transition.  See Passing the Baton: Financial Fitness Key to Succession Planning (July 29, 2009).