Facebook Live with Eileen Kerlin Walsh every Friday between 9:30-10:00 a.m.
Join Eileen for a “Fireside Chat” to hear estate planning tips that:
- Protect your assets, yourselves and your loved ones
- Avoid court involvement
- Preserve family harmony
In 20 years, we’ve seen it all. Families ruined over inheritances. Call our office for your Wills & Trusts, and we will provide sound estate planning, “The Healing Law”, guaranteeing you peace of mind and family harmony!
In a recent Fireside Chat on 1/29/21, Eileen discussed Passing on a Family Business without a Fight
Click here to view the video on Facebook; read below for the transcript:
Many of you have a business, construction, real estate, income properties, floral shop, a farm. Many of you have them in your assets, and I will encourage you to give thought to how that business will be passed on, as you think about passing on your other assets.
Some of you are lucky enough to have had a family member working the business from when they were a child. You showed an interest, developed your expertise, and are in a position to keep the family business running after you are no longer able to or you’re no longer here.
But while that’s a win for you and for that child, it has hurtful, potential dangers to your family harmony if you don’t consider what is going to happen if you don’t come up with a plan. I’ve seen many difficult family situations because of it. I’ve seen a family farm that had been in the family for generations have to get sold. It was sad, and not what the parents or grandparents wanted. I have seen a child left without a livelihood because now suddenly the family business had to be sold and they had nothing that they could do because this is what they had done all their lives. I’ve seen all the family money end up in lawsuits, and more often than anything, the kids not speaking to each other, estranged for life because they have fallen out over the way the family business has been handled.
So I’ll make sure that doesn’t happen to you. What can you do? Come up with a plan! Have the conversation, even if it’s difficult. Spouses should talk to each other and figure out what you want. Talk to the child or the children who are working in the business, and involve the children who are not working in the business. Talk about what everyone would want.
There are solutions.
Do you have enough other assets that this family business can be gifted to the child who is working in it? Let’s get that in the paperwork. If the family’s business pays for that child’s income but there aren’t enough other assets to pay off the other children, then is there going to be a sale in order for everyone to get an equitable gift? And if so, we need to give the child who is working in the family business time to relocate and rearrange their life, as well as wind up and sell the business. These things take time. We cannot have a sibling knocking on the door for their share of their inheritance a week after the death of the last parents.
There are lots of solutions. There are buy-sell agreements. This is a wonderful agreement where we can decide what’s going to happen with the business. There can be a succession if there’s a disability upon death. We can even supplement the buy-sell agreement with an insurance policy that will provide the money to pay off the other siblings and keep the family business intact, and keep the livelihood of the child working in the family business also going forward.
We need to have the conversations and we need to get it into the plan. All of these solutions will go into your Trust, your Living Trust, or maybe your separate Trust. And if we ever need to change it, we can change the Trust. How do we get that reflected in the business? If you have an LLC, then we will assign your interest in the LLC to the Trust. We avoid probate, keep it all private, and the solution will be right there in the Trust.
If you have a corporation, do you have a fancy corporate book? Do you have issued shared certificates? If so, we will have a Corporate Resolution, and we will reissue those shares in the name of your Trust.
All of this can be taken care of with a really good succession plan, contained in your estate plan, and I can guarantee you, then, family harmony. Even if someone’s nose is going to be put a little out of joint, even if there’s going to be slight grievances, it’s much better that they be had while you’re here, while they can be talked about, while the other siblings know what is going to happen. They can get a voice in the solution. This is the way to family harmony. And it means that someone isn’t going to wonder what will happen when you’re not here to talk to them about it, when we no longer have the time to create that beautiful solution and make everybody happy and equally loved, which is also what I know you would want.
So, everything talked about. Everything into the plans. Everything up to date. And everyone lives happily ever after, and beyond.
I’m going to leave you with a quote that I love from Dale Carnegie, “Today is YOUR day. Make the most of today. Let the winds of enthusiasm blow through you.”
Thank you for watching, and I will see you next time on my little Fireside Chat. Until then, goodbye.
