TIP OF THE MONTH - October 2007

HEY YOU S.O.B.!! (Sons of Bosses)

The recent economic expansion has benefited the owners of family businesses just as it has large corporations, and many have accumulated significant wealth. Accordingly, we read of a consulting firm who recently polled the owners of 500 family businesses to assess their most important concern. The three major issues of concern were:

Estate and tax planning to retain their wealth
Planning for the transfer of ownership
Enhancement of communication lines within the family

Such issues as family conflicts with respect to business succession, wealth sharing and sibling rivalries which formerly headed owners’ concerns were of relatively minor importance to survey participants. The reason probably is that there is much more money to go around so that intra-family conflict is much less intense than in the past. On the other hand, since many family businesses have prospered extensively, there is much more at stake for first generation business owners in ensuring an orderly business succession. Accordingly they should meet with us, as their CPA’s, and perhaps other advisors, well in advance of their projected retirement and devise careful long-range plans for the business transfer to the next generation. Helping owners deal with the important issues objectively and providing professional advice to minimize taxes are two ways in which we can provide valuable service in this area.