Business Succession Planning Update: Saving the Goose that Lays the Golden Egg (Currently Unavailable)

Author: Bradley Burnett

CPE Credit:  4 hours for CPAs
4 hours Federal Tax Related for EAs and OTRPs
4 hours Federal Tax Law for CTEC
3.5 hours Tax Planning for CFP

90% of all U.S. businesses are family businesses. These 20 million businesses generate 49% of GDP, employ 59% of the workforce and create 78% of new jobs. 70% of family businesses fail to survive the second generation and 87% fail to survive the third generation. Why the high failure rate? Two reasons: 1. Failure to plan adequately for succession from the older generation to the younger generation from logistical, liquidity and emotional perspectives; and 2. Failure to adequately estate plan to minimize income and transfer tax costs and creditor/predator risks.

Join expert, Bradley Burnett, J.D., LL.M., as he analyzes why family business succession plans (or the lack thereof) most often fail, identifies the precipitating downfalls and explores remedies to prevent them. A model(s) is presented for effective succession from one generation to the next. Particular emphasis is provided on how recent developments and estate and gift tax uncertainty on the immediate horizon may tip the balance.

Publication Date: February 2019

Designed For
Any person interested in successfully seeing a closely held family business from one generation to the next.

Topics Covered

  • Succession— Small Business' Biggest Threat
  • Family Business Succession Often Fails But, Why?
  • John Adams re: The Role of Generations
  • Business Succession vs. Family Succession
  • Family Business
  • Estate Plans
  • Intestate Estate Plans in America
  • Growth Plan Rich/Succession Plan Poor
  • Plan with Audacity/Execute with Vigor
  • Succession— On Whose Terms?
  • Most Have Goals, But Not Effective Plans
  • Huge Wealth Transfer on Horizon
  • Supply of Closely Held Businesses Surging
  • Creating Intended Results
  • How Does Client Choose How to Exit?
  • Harry Truman Decision Model
  • Choices for Future of Business and Family
  • Nature of the Business Dictates Depth of Plan
  • Key Objectives to Effective Family Business Succession Planning
  • Stumbling Blocks to Effective Intergenerational Succession Planning
  • Conflicts in Family Business Succession
  • Conflicts— Differences in Business Values and Family Values
  • Conflicts— Sources of Tension
  • Problems Manifested Within Families
  • Conflicts— Personality Types and Manifestations
  • Profiles of Family Members in Family Business
  • Family Business Management Problems
  • Profiles— Basic Forms of Family Business
  • Transitions (or Not) Between Forms of Family Business
  • Three Types of Transitions
  • Recycling Transition
  • Evolutionary Transition
  • Devolutionary Transition
  • Transition Issues to Be Resolved
  • Challenges Inherent in Each Form of Business
  • Controlling Owner— Challenges
  • Sibling Partnership— Challenges
  • Cousin Consortium— Challenges
  • Role of Women, In”Laws, and Divorce
  • Planning for Business Succession
  • Basic Questions
  • Buy Sell Agreements
  • C Corp AMT and Buy Sell Agreements
  • Model for Developing a Family Business Succession Plan
  • Governance Structures
  • Tax Cuts Jobs Act— Transfer Taxes
  • Gifting Under TCJA
  • State Estate Taxes
  • Generation Skipping Tax Under TCJA

Learning Objectives

  • Identify the challenges and opportunities facing entrepreneurial business desiring to pass on within the family to a future generation(s)
  • Recognize the approaches and tax breaks to make entrepreneurial business possible
  • Recognize correct statements regarding family businesses
  • Identify a business goal with respect to exiting from one's business
  • Identify the steps in the Harry Truman decision model
  • Identify and apply the eight choice questions
  • Describe the key objectives to effective family business succession planning
  • Differentiate between family values with respect to change
  • Identify a source of tension as it relates to conflicts
  • Describe the characteristic of the first-among-equals sibling partnership
  • Identify a challenge faced by a cousin consortium
  • Describe a transition where senior leadership is replaced without changing the basic business form
  • Identify the first step in the model for developing a family succession plan
  • Identify the annual gift tax exemption for 2019
  • Recognize the approximate percentage of crises faced by family businesses
  • Identify a stumbling block to effective intergenerational succession planning
  • Describe types of sibling partnership leads the company as a team
  • Identify a transition where a simpler form of business changes to a more complex form

Level
Update

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
Basic understanding of business succession planning

Advance Preparation
None

">
 Chat — Books Support