Succession Planning: Surviving the Second Generation

Succession Planning: Surviving the Second Generation

Business Journal
by Nancy F. Blumberg, CPA
Simon Master & Sidlow, P.A.

As founder and CEO of a prosperous small business you undoubtedly have a keen interest in ensuring its continued viability upon your retirement, disability or death.However, more the 50% of family businesses do not survive beyond the second generation.Consequently, it is important for you to formulate a succession plan that will keep the business going and ensure the security of your heirs.Even if your withdrawal from active involvement in the business is not in the immediate future, formulating a tentative succession plan now is smart business.

If you have younger family members who have both a desire and the necessary expertise to operate the business in your absence, there are several options open to you.The tax law encourages you to begin giving (“gifting”) common stock in the business to family members as soon as possible.The annual exclusion can result in all estate and gift tax liability being eliminated on transfers of up to $10,000 worth of stock each year to each donee ($20,000 per donee if you are married and gift-splitting is elected).If your business is not already incorporated, you can incorporate it tax-free in order to implement the gift program. More…

Personal Financial Planning for Family Business Owners: Providing for the Future Without Rocki

Personal Financial Planning
for Family Business Owners:
Providing for the Future Without Rocki

How do you plan for retirement when most of your wealth is tied up in the business? That’s the challenge facing many owners of small and mid-size companies.

For owners of family businesses, though, that is just the beginning of the challenge. Because they must not only deal with approaches for generating retirement income, but with delicate family planning issues as well.

If the next generation of family members won’t be involved in the business, personal financial planning could take one course. If some members of the next generation want to be in the business and some don’t, personal financial planning could take another course. And if all members of the next generation expect to be in the business, it could take still another direction. More…