Business Succession Planning: Lessons Learned from the Lack of a Plan

A recent post in the New York Times’ “You’re The Boss” column reflected on lessons learned from difficult company successions that were made that way because there was no plan in place to follow.

Susan Parker owns Bari Jay, a bridesmaid dress company that she and her sister inherited from their father. Parker had never planned to run Bari Jay, but felt she owed it to her father’s legacy to step up. However, she and her sister are not putting that burden on their own children. Each sister has two children, and they are currently in the throes of business succession planning that will give those children a choice on whether or not they enter the business. “We want to do everything our father didn’t,” Parker said. “I’ve learned from this whole process that it’s so complicated to get what you want.”

So Parker and her sister have created a plan that provides themselves and their children with a number of choices. If one sister dies or leaves before the other, her half is put in trust for the children while the other sister continues to run the company. They have made provisions in the plan for buy-out scenarios for themselves and their children, and included a clause that prohibits the spouse of either sister from inheriting a part of the business – a savvy move that protects the company from divorce and remarriage.

Parker said her father never made a plan to leave the company to her and her sister, but it would have been helpful if he had. She and her sister are determined to give their children the choice they never had by planning for a future that comes to us all eventually.

Ever thought about what would happen to your business in the event of your passing? The time has never been better for small business owners to schedule a comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Action Session. Give us a call at 212-671-1973 to get more information, or simply complete the form, and return it to info(at)hawkeslawgroup.com. Our Client Services Director will contact you within 24-48 hours to schedule your LIFT Foundation Action Session. Normally, this session is $1,250, but if you subscribe to our mailing list with your first name, email address, mailing address, and mobile number, we will waive that fee.

About Priscilya M. Hawkes, Esq.

Hawkes Law Group P.C. serves business owner creative-types with "larger-than-life" dreams.
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