Succession Planning For The Family Business

Many owners of family enterprises are failing to pass the torch.

Some Statistics:

• Over 90% of all entrepreneurs don't have a viable estate succession plan on death ( Source: Survey by the Federal Business Development Bank )
• Only 3 in 10 family businesses survive to the next generation
• 90% fail to make it to the third generation ( Source: Canadian Association of Family Enterprise )

Why Does This Happen?

• Lack of proper planning by the business owner
• Fragmented advice from financial and professional advisors
• Tax liabilities arising on transfer of business

What Can You Do To Ensure The Continued Success Of Your Business?

• Work with your family and professional advisors to develop a sound estate and business succession plan

Elements Of The Succession Plan

• Wealth accumulation for retirement
• Cash to pay taxes arising on death
• A plan to keep the business financially sound
• Treating all family members fairly
• Separate source of income for spouse
• Method of passing control in business

Some Common Planning Tools

• Wills for family members
• " Freezing " current tax liabilities
• Family trust
• Buy -sell agreements
• Financial tools such as RRSP's and life insurance

The Role Of Life Insurance In Succession Planning

• Estate liquidity to cover debts, provide for family members, provide charitable gifts and pay taxes
• Creditor protection
• Probate avoidance
• Tax sheltering for retirement income

By: Anthony Ciccone, B. Comm. and Mark Zlotnik, CA, CLU