Succession Planning with Multiple Siblings

A Simcoe County Business owner approached us recently with a desire to transfer their business between generations, and with uncertainty in terms of the paperwork. As the business was transferring from parents who wanted to retire and was complicated by multiple children’s involvement, there was a need for a solid business model that made sense and did not create ill-will within the family.

They needed a plan that protected the built up investment in the business and allowed the parents to retire, but it also needed to consider the needs of not just the successor but the successor’s siblings as well.

Their actual service needs also included measures to reduce their tax liability on transfer.  We dealt with corporate control and changeover in day-to-day management of the business with them to create a clear plan moving forward. We then crafted a tax plan for transfer while acting as mediator between the parents and children.

Having a professional involved in these emotionally fraught situations can be the difference between business and family success moving forward, or falling apart. The deal we negotiated allowed the child to take over the business without crippling it with debt, but still provided handsomely for the parents’ retirement.

Succession Planning leads to Positive Tax Picture

We recently had a client in the farming sector come to our office to explore how to transfer the business and property between relatives. In this case, the parents needed to understand the best way to have their children take over the farm.

Their fears were that they had left things very late and they felt a sense of urgency surrounding the situation. Confusion and heightened emotions are inherent in this type of activity, and the family in question, understandably, felt lost in terms of how to go about the transfer. They just wanted it over with.

We sat in conversations with the parents and the children to examine some ideas we had developed, and that we believed would bring about positive results. We conferred with them on succession planning and partnerships. We also advised them that incorporation at the right time could provide a significant savings in taxes.

These measures, alongside clear advice and understanding, engendered trust, reduced communication problems and opened up ideas that the client had not been aware of. The solution agreed upon was mutual and the immediate tax implications were significant—and strictly in their favour!