Business Succession Planning and Generational Transfers in Prescott
Family businesses are the backbone of the Prescott economy.
Business Protection and Generational Transfers
Family businesses are the backbone of communities across the country — and Prescott is no exception. In Arizona, many of the companies shaping our local Prescott economy are family-owned or family-controlled, reflecting a national trend in which roughly 90 percent of all U.S. businesses fall into this category. These Prescott based organizations range from small local operations to multi-generational companies with significant assets, and they play a powerful role in supporting the economic growth in Prescott. Nationally, family businesses generate nearly half of the Gross National Product and pay about half of the country’s wages, and many of the corporations included in the Fortune 500 are family-run.
Despite their strength, family businesses in Prescott and throughout the country face a familiar challenge: surviving beyond the founding generation. At any moment, about 40 percent of family businesses are in some stage of ownership transition — yet two-thirds of those initial transfers are unsuccessful. Of the businesses that do survive the first handoff, only half make it through a second.
At Kierman Law, we help Prescott families protect their businesses, plan for smooth and strategic generational transfers, and build long-term continuity so the companies they’ve worked hard to create can thrive for decades to come.
Business Planning for the Future – Changes in Ownership and Management Are Key Concerns in Prescott
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
In Prescott, long-term business stability begins with careful coordination of your business, financial, and estate plans. Each piece must work together to ensure there is enough liquidity to meet your goals — whether that involves supporting the next generation, covering estate taxes, or addressing business debts. With the right structure in place, an appropriately funded estate plan can protect your family, your company, and your legacy. In many cases, life insurance — selected in the proper amount, type, and ownership structure — can serve as an effective tool to fund these needs.
Kierman Law helps Prescott families bring these moving parts together. We work with you to align your business planning, financial strategy, and estate plan so your family’s goals are clear, protected, and fully supported for the future.
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