Estate and Business Succession Planning
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Estate and Business Succession Planning

I wanted to see how people respond to my comments regarding our Entrepreneurs, Leaders, and CEO,s meeting.  Several people have wondered what I am typing throughout the meeting.  Well here it is. 


Our ELC meeting on June 24th was very interesting.  The topic was on estate and business succession planning.  Sara Murphy, an estate attorney opened up the meeting under the direction of Melinda Olbert, a financial planner and attorney. 


Sara was delightful.  She is in the trenches and currently helping people get their estates in order and so her speaking is fresh and lively.  The first thing I picked up was that she loves what she does and she loves helping people. 


Sara Murphy grew up in Enid.  She had plans to go to Malibu California for college at 18 years of age but because of a death in the family was asked to stay in OK to manage an apartment complex for the family while going to school here in Oklahoma.  Sara is sharp and no doubt would have achieved more for herself by leaving the family needs behind and pursued her own independent goals but she considered others as more important than herself and stayed in Oklahoma.  So her character has been tempered by making the right decisions in tough times. 


Her advise was given out of real life experience with a view to help you get where you really needed to go.  She started by listing the top five mistakes business owners make in their preparation for estate planning.


Five Top Mistakes

1.  There is often a disconnect between their business plan and their personal estate plan - these need to remain separate but you should have both and each should be considered while preparing the other.

2.  Failure to have an updated power of attorney - the wife or husband of a business owner cannot sign checks or make financial decision to keep the business open without the power of attorney given to the proper party.

3.  Deeds and titles need to be titled correctly and aligned with the business plan.

4.  Often we have outdated business and organizational documents without the required annual minutes.  If you don't treat yourself as a professional business neither does an attorney or tax agency.  The corporate shield may easily be broken. 

5.  You may have the wrong type of business formation - LLC, S-Corp, C-Corp, etc.  All available business formations have strengths and weaknesses.  Therefore choosing the right one for your business is paramount.  Begin with the end in mind. 

Sara encouraged anyone with more than one owner to have a very detailed buy sell agreement is a must if you have a partner.   Without a buy sell agreement, if your business partner dies you are now partners with their spouse or kids etc. 

Deal with death and incapacity

How to evaluate the business so you know what to pay the other party


Sara gave us 10 Steps to Business Succession but I couldn't type fast enough but I did get the list of professionals you need for putting a proper plan in place.  They are:

                            1.  Attorney

                            2.  Insurance Advisor

                            3.  Financial Planning Advisor    

                            4.  CPA


She impressed on us that the fatal flaw is procrastination. And she ended with a reality statement.  "Pay me now, or pay me later"  If you have no estate plan or business succession plan you will pay an attorney for probate, clearing up issues, defending you, etc.


Random Facts

  •             1.  You are required to file a Federal Estate Tax Return.
  •             2.  Over 80% of business in USA are family owned
  •             3.  A business in transition lasts a total of 24 years.   

Questions asked from ELC Members

Melinda asked about a friend with four siblings who has a franchise.  If you give it to one, what about the others? - Also, her dad owned 50% of her business and she didn't know it.  So his portion may be inherited by a child or other person.  Answer: Communicate.  Talk sooner rather then later.


Gerold Coury - none of my children have a vision for my business, how do I cast vision to them?  Answer:  This is a common problem.  Sit down and talk.  Communicate.


Tom - My son deserves my business because of his loyalty and commitment, my daughter has no interest in the business but of course I want to take proper loving and balanced care of both.  Any ideas on how to do that?  Answer:  Balance the values with life insurance or other financial tool.  


Eric - What does it cost for an estate planner?  Answer:  The range in cost is from $1,000 or $2,000 and definitely under $10,000.


David Corona - If the partnership breaks how do you afford paying for the partner's portion?  Answer:  It should be covered in the buy sell agreement. 


Sherry - What is a Charitable Remainder Trust?   Answer:  You put your funds into a trust and donate them to a charity and you get the interest from the trust until you die.  It is a complex planning tool but a good one to someone who is charitably inclined.


What is the difference between a Irrevocable Trust and a Revocable Trust? Answer:   because of easily being misunderstood when being spoken a Revocable Trust is now called a Living Trust.  They are private and comprehensive and they bypass probate (about 9 months delay).  The will is like a donkey slow but carries a good load.  A trust is a Clydesdale horse - quick elegant,


Tim Kilkenny - How do you find a trustee who cares?  We paid a maid for three years after she quit.  - Answer:  Find someone local. 


Gerold Coury - How do you get people to take this seriously?  Answer:  Start early. 



Tom Pace - commented on some things happening in his business to demonstrate that the price for doing things right far outweighs the cost of legal defense. 


Boe Parrish - having gone through this planning process I want to say I am glad I did it and have peace as a result of it. 


ELC Roundtable is a group of Entrepreneurs, Leaders, and CEOs.  Members meet for one hour weekly to share their experiences, knowledge, and ideas on a topic.  We are a diverse group of men and women with a wide range of business experiences.  This provides a great environment for the development of new ideas and an excellent opportunity for the more experienced business owner to share their knowledge with the newer business owner.  Members are encouraged to speak once and only once during the meeting so that everyone has the opportunity to contribute.

4 comments (Add your own)

1. RavingFanPro wrote:
Wow - this is really helpful info! It seems so hard to plan for things in the future that seem "so far away," but the truth seems to be that we just CANNOT afford NOT to plan these things out.

If business owners don't feel stress because these things aren't planned out, how can they get the motivation to spend the time/money to properly plan ahead? And, can it be awkward for a partner to initiate this kind of planning when the other partner is not motivated to do so?

Fri, July 3, 2009 @ 12:15 PM

2. David Hamilton wrote:
Tom, I talked with you today, July 28. Jesse Spencer gave me you blog link. There's an additional tool that you would love. It's called a Family Bank. It can reduce or completely relieve the confiscation of your estate into the future. Best of all, it creates a family board situation that can cause the right successor from the correct branch of the family to lead a business into the future. No one owns the business, they all benefit from a decision to put the correct and most worthy person in positions of leadership. Hershey candy co. is an example of this in action. The business becomes the healthy source for a family foundation to do what the family's values dictate into infinity.

The info from the blog is obviously somewhat basic. We believe that the values that are best passed on are the ones that caused you to be blessed in the first place. Hard work, integrity, placing faith in the One that controls and blesses us because of good decisions and doing what is right. Wording in place in the Family Bank documentation and Family Constitution serves as a "Trustee Handbook" to incentivise future generations and teach them through action far into the future, far beyond your years. Encourage entreprenuralism, thriftiness, advancing through education and conservative values. This is what we help families do every day! Our group name is Legacy Planning Partners, L.L.C.. I look forward to hearing from you, per our conversation today. God Bless You and Yours

Tue, July 28, 2009 @ 7:54 PM

3. David Hamilton wrote:
To RavingFanPro: Each person has their own seperate motivation for planning. Something that ignites their imagination, and truly motivates and encourages a vision or purpose to their plan. A great plan, in turn, gives purpose to what and why they are building their estate in the present. Greatest sustaining factors are usually tied to lasting values such as family, faith,entreprenuralism, etc.. Passing winning values that make future generations successful and provide exceptional opportunities is usually the optimal goal. Having said all that, if your lead to do planning creates obvious excitement, it is very contagous and often your partner will follow.

Thu, August 6, 2009 @ 7:05 PM

4. Maria wrote:
It's good to read about a year in review. Make's me cnlmetpoate mine more and I appreciate that. Have to throw down respect to you and Andrea for running the independent businesses you both do. You guy's do what you do well. Keep it up.

Mon, November 30, 2015 @ 12:20 PM

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Founder and CEO of Diverse CTI.  Bachelor degree in ministry with an emphasis in counseling.

His vocational calling is to help people grow and develop in all areas of their person - spirit, soul, and body. He has risen to the top of his industry and has been recognised as a leader in communications, specifically telecommunications and data networking, for more than 25 years.  His passions have resulted in building Diverse CTI into an excellent company with an impecable reputation.  He has enjoyed designing communication strategies for other excellent companies over the past 25 years and is still having fun. Find out more about Tom!