Opinion
Enjoying the ride: A Loving Legacy
Published
1 year agoon
Posted By
AdminBy Benjamin Spiker EBS CONTRIBUTOR
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As a business owner, the thought of leaving my personal legacy to my family via my business is always near to my heart. As we celebrate Valentine’s Day and the tradition of sharing our hearts with those we love, I’d like to share some thoughts for others who may be involved with a family business.
Transitioning your family business to your heirs may sound simple enough but doing it successfully can prove difficult. To help improve your transition’s chances for success, consider family business governance, a system of correlated tools and actions that support the next generation with controlling, owning, and operating the business. The framework establishes business protocols, describes how future ownership changes occur, and establishes a precedent for making business decisions.
The following are several tools that can be utilized as part of a family business governance system, including:
A buy-sell agreement is a legally binding contract stipulating how an owner’s share of a business may be reassigned if triggering events occur, the price that will be paid, and the payment structure.
A family employment policy documentcan be kept within the family for private use or incorporated into the business’s human resource documentation. It sets expectations for heirs, spouses, and extended family members about such issues as how they can obtain employment in the business, the requirements to attain key positions, the compensation standards to be used, and incentive language for family members.
A distribution or dividend policy is key in setting expectations with family members regarding what distributions they should expect to receive from the business. Business owners must balance the need for cash to maintain or grow the business with the desire to receive distributions.
A professional board of directors is a governing body that helps oversee the business and makes major decisions. A board generally comprises three, five, or seven professionals from various industries that have the subject matter expertise to assist the company strategically.
A family board or council is a group within the family — or may include the entire family — that comes together to make decisions about the business on the family’s behalf.
A company mission statement can be valuable to your employees and your family as it addresses the business’s purpose and vision and can help guide future company leaders.
Your estate plan can address ownership, control, distributions, and several other factors.
The business’s governing documentsshould be reviewed at the same time the family business governance system and tools are put in place. Revisions to these documents or corporate resolutions stored in the corporate minutes may be needed to align these documents with the company’s governance system.
Transitioning the family business to the next generation is much more than transitioning shares. A well-thought-out and documented plan that addresses ownership, control, and operations helps build a strong governance system for your business. This system, combined with communication with the next generation, can be key to your transition’s success and will help allow you and your family to Enjoy the Ride!
Benjamin D. Spiker is the Co-Founder and Managing Director of Shore to Summit Wealth Management. His wealth management career spans more than 23 years and he currently works and lives in Annapolis, Maryland with his wife, two sons and daughter.
Wells Fargo Advisors Financial Network is not a legal or tax advisor. Be sure to consult your own tax advisor and investment professional before taking any action that may involve tax consequences.
Wells Fargo Advisors Financial Network did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of Wells Fargo Advisors Financial Network or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy Wells Fargo Advisors Financial Network and Shore to Summit Wealth Management are not legal or tax advisors. You should consult with your attorney, accountant and/or estate planner before taking any action.
Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Shore to Summit Wealth Management is a separate entity from WFAFN. Shore to Summit Wealth Management is located at 105 E. Oak Street, Unit 1A Bozeman, MT 59715 # 406-219-2900
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My Barking Dog is a nightmare comedy
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My Barking Dog is a nightmare comedy that tells the story of Toby and Melinda, two lonely people whose lives are forever changed the night they encounter a starving coyote at their apartment building. Over time they grow to expect him, leaving ritual offerings to entice the coyote every night. Toby and Melinda forge a connection over this visitor and share curiosity and concern about his presence in the city. The coyote expands their world–until, one night, their world is shattered. Their lives are pushed suddenly into uncharted territory, sending them on a surreal odyssey that changes their city–and the world–forever.
Directed by LX Miller. Starring Max Schneider and Denise Hergett
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Suitable for ages 16 . No animals are harmed in the staging of this production.
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