The first meeting with a client who owns a business often sets the tone of the relationship. The lawyer needs to first understand the client’s business and next understand the client’s goals with the business to determine the best planning strategies. The relationship should aptly manage the client’s expectations and endeavor to minimize family disputes. From time to time, there is a dichotomy between the older and younger generation, which can affect the structure of control of the business moving forward.[1]
In family business succession planning, there are ten steps an attorney can follow:
1. Gather and analyze all pertinent financial, legal, and other business data.
2. Identify the client’s financial and dispositive goals.
3. Coordinate and review the data and goals with the client’s other advisers.
4. Appraise the value of the business.
5. Analyze the needs of the client’s family.
6. Identify potential ownership and management successors.
7. Identify the client’s options and make planning recommendations.
8. Discuss ramifications and modify goals accordingly.
9. Establish a realistic timetable to implement the plan.
10. Follow through on plan implementation.[2]
[1] Brad M. Kaplan, Family and Business Succession Planning Stretegies Leading Lawyers on Navigating Key Tax Issues, Dealing with Family Concerns, and Avoiding Potential Pitfalls for Closely-Held Businesses, 2009 WL 2029273, Thomson Reuters/Aspatore (July 2009), at **1-2. [2] For a further discussion of these ten steps in family business succession planning, see Joseph C. Vitek, Succession and Liquidity: Two Key Considerations for Closely Held Businesses, 2010 WL 2828088, Thomson Reuters/Aspatore (July 2010)
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