Business Succession Planning and Generational Transfers
Family businesses are the backbone of the American economy.
Business Protection and Generational Transfers
Family businesses are the backbone of the American economy. Some 90 percent of all businesses in this country are either family-owned or family-controlled. These businesses span every sector of our economy and vary in size, assets, and net worth. Family businesses generate an estimated one-half of the U.S. Gross National Product and pay half of all wages earned in this country. And, about one-third of all businesses included in the Fortune 500 are family businesses.
One of the problems faced by family businesses is that they tend not to outlive their founders. At any given moment, 40 percent of family businesses are in the process of transferring their ownership. Unfortunately, two-thirds of all initial transfers fail. Of the one-third that survives an initial transfer, only one-half will survive a second transfer.
At Kierman Law, PLC, we help families protect their businesses and make generational transfers to ensure the continuity and lifespan of the family business.
Business Planning for the Future – Changes in Ownership and Management Are Key Concerns
The family element in every family business can mean the difference between its success or failure during the transfer process. The retirement, disability or death of the business owner are all common events that can trigger a business transfer.
Tough questions must be asked and answered.
- Who will run the business in the future?
- Can the surviving spouse, a child, or a non-family member key employee continue its daily operations?
- Is the surviving spouse financially dependent on the success of the business in the future?
- What arrangements have you made for the inheritance of your children who are not active in the business?
- Have you in-law proofed your estate?
- Are you trying to preserve your legacy for your grandchildren? Have you considered grandchildren that may want to run the business in the future?
Coordinating Business and Estate Plans
Business, finance and estate plans must be carefully coordinated to ensure there is sufficient cash to fund your objectives. An appropriately-funded estate plan can meet all of your people-planning objectives and provide liquidity for estate taxes (and business debts). Life insurance, owned in the proper amount, type and manner, may be effectively used to fund such money matters.
Kierman Law can help strategize and coordinate all business, finance and estate plans to ensure your family goals and objectives are met.
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Contact us today to schedule an appointment and ensure protection for your family and business.
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Let us know how we can help you plan for the future.