In today’s seminar Scott Heintzelman, CPA, CMA, CFE of McKonly and Asbury LLP provided great insight and thoughtful questions as Business Families consider passing the family assets to the Next Generation. His thought-provoking theme – Does Fair Mean Equal in the Family Business raised significant questions and issues that need to be addressed.
Scott holds a B.S. in accounting from Messiah College and is a Partner with McKonly & Asbury, LLP. He serves clients in a variety of industries with a specialization in providing business advisory services to the Middle Market with a special interest and focus in working with family owned businesses.
Scott clearly described that for many families splitting of assets is not clear-cut. Scott stated when people see themselves only as a “family business” they struggle with the desire to treat everyone equally – this despite varying contributions to the business. These families tend to focus only on equality as the deciding factor when setting salaries, paying bonuses and when passing assets to the next generation. This is often the situation when consultants or advisors are required to assist with family disagreements (or worse…all out family war).
When people see themselves as a business family, they tend to focus on the qualitative and not simply the quantitative variables. With family, this is the only way to truly achieve balance and hopefully harmony.
There were several key items Scott believes families need to recognize and can start working on immediately:
1.Business Owned Families should recognize that one size of estate planning does not fit all. Know what it is you want to accomplish when planning for the transition of Assets.
2.Put in place good governance, good systems, and good processes to manage communications:
This could include a Family Council; an Advisory Board; Family Investment Policies; sound business principles; rewards and compensation based on performance (this will reduce the entitlement mindset)
3.Business Families must wrestle with this difficult issue of transitioning the assets while the parents are alive to avoid hurt relationships and to avoid a family battle in the next generation.
If you would like to discuss these critical issues in greater detail, please contact me, I would be happy to talk with you.
Scott, Thanks for raising the questions and issues we all need to address.
Read more http://feedproxy.google.com/~r/TheNetworkOfFamilyBusinesses/~3/tKjMGc4n_1s/passing-assets-to-next-generation-does_18.html
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