News Column

Randy Siller: Succession Planning Is Imperative for Family Businesses

Mar 18 2013 12:00AM

Marketwire

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NEW YORK, NY -- (Marketwire) -- 03/18/13 -- A recent article in the Tampa Bay Business Journal claims that succession planning is an important concern for all companies, but for family businesses in particular. When a matriarch or patriarch steps down from running the family business, the article says, the stakes for the entire family can be high -- yet many family businesses fail to do the proper succession planning. The article has won a comment from Randy Siller, a financial services veteran who is zealous about succession planning, and assists many family-owned businesses in laying out their long-term financial strategies. Siller has commented on the article with a new press statement.

"Less than half of family businesses survive to the second generation, and a very small percentage make it to the third generation," remarks Randy Siller, in his press statement. "There are many factors involved, not the least of which are family dynamics and estate taxes."

Siller goes on to note that some family business scenarios are more complex than others. "One family dynamic that requires particularly careful planning involves a situation in which one or more children work in the business and one or more work outside the business," he explains. "In these scenarios, a number of difficult issues need to be worked through."

Randy Siller details a few of these complexities. "How much of the business interest should be left to those in the business versus those not working in the business? What is fair? These are the kinds of questions that must be addressed, and ultimately planned for," he says. "Moreover, how will those outside the business be 'equalized' for business interests left for those working in the business? What does equal mean? How will the business be valued for this purpose?"

Siller continues by listing further legal and financial issues to consider during the succession planning process, including the impact that estate taxes have on the ability of the business (a non liquid asset) to be passed on to the next generation, as well as the means by which those taxes will be paid.

The list of concerns goes on from there. "If children not working in the business will receive some business interest, should it include the right to vote, or should it not?" muses Randy Siller. "Should those not working in the business have any say over the salaries of those working in the business, or whether or not a merger or sale of the business should take place? These are just a few of the practical considerations that families must make when thinking about the future of a family business."

ABOUT:

Randy Siller is a veteran of the financial services industry, and a founding partner of the firm Siller & Cohen. For more than two decades, the firm has offered wealth advisory services to families, individuals, and businesses across the country. Randy Siller has been cited in numerous publications, including Time and Fortune.

Registered associates of Siller and Cohen are registered representatives of Lincoln Financial Advisors Corp. Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Siller and Cohen is not affiliated with Lincoln Financial Advisors Corp. CRN 201301-2076318



Source: Marketwire