This presentation was given to the Lake Michigan Estate Planning Council.

1. Family Business SuccessionFamily Business Succession
Top Tips for AdvisersTop Tips for Advisers

2. Introduction
• Attorney and shareholder with Cunningham
Dalman, P.C.
• Practicing for 18 years in the areas of business
law and estate planning with a specialty in
family business succession.
• Have a Masters in Tax, Masters in Business
Administration, and am a Certified Financial
PlannerTM.

3. Overview
• Talk about tips for developing relationships with
family business clients.
• Discuss practical tips for helping family business
clients.
• Provide planning tips for the family business
successions.
• Distribute “take aways” from the presentation.

4. Business Development Tips

9. Practice Tips

14. Planning Tips

16. Gift v. Sale to G2

17. Equality v. Most Qualified

18. Independent v. Advisory Board

20. Voting Trust v. Proxy

21. Planning Options
• Have the company borrow debt to fund the buy-
out of G1.
• Have G1 bought out with a seller note (i.e.
using the future earnings).
• Sell G1’s equity to a grantor trust for the benefit
of G2.
• Gift equity to G2 and then structure deferred
compensation plan for G1.

22. Planning Options
• Purchase life insurance to provide the liquidity
to buy-out the inactive members of G2.
• Transfer equity to the active members of G2
and other assets (i.e. business real estate or
personal assets) to the inactive members.
• Have the company buy-out G1 by gifting a
small equity interest to G2 and then redeeming
the rest of G1’s equity.

23. Planning Options
• Transfer equity to the active family members of
G2 and purchase life insurance for the inactive
family members.
• Restructure equity to have “preferred” interests
for inactive family members of G2 and
“common” interests for the active family
members.

24. P. Haans Mulder, JD, MBA, MST, CFP®
Cunningham Dalman, P.C.
321 Settlers Road
Holland, MI 49423
(616) 392-1821
phmulder@cunninghamdalman.com
Questions….

25. FAMILY BUSINESS SUCCESSION: TOP TIPS FOR ADVISERS
Business Development Tips
• Consider joining the Family Business Alliance and inviting your family business
clients as well as other advisers to their events. Share “take aways” from those
events.
• Sign up for emails from the Family Business Consulting Group as well as
subscribe to the Successful Generations podcast. Share helpful content with
clients and advisers.
• Write a blog for the Family Business Alliance and post on LinkedIn about family
businesses.
• Get to know and network with other advisers who are focusing on helping
family business clients.
Practical Tips
• You will need to have a system for setting regular meetings with family
business clients.
• Consider having annual meetings with family businesses or casual lunches with
them to “check in.”
• Get to know the entire family and the family dynamics as much as possible.
• If you have a junior colleague, have that person get to know the members of
G2.
• Engage an adviser who has a lot of “financial analysis” horsepower for the
succession planning.
• Encourage family business clients to establish early on a relationship with an
investment adviser to determine their financial needs/goals for retirement.
Planning Tips
• Evaluate what the most appropriate governance structure (i.e. family,
independent, or advisory board).
• Consider how to get the voting control and perhaps equity to the most qualified
family members while still equalizing the distribution of assets to the children.
• Evaluate all levels of taxes which includes: income, estate and gift, and real
estate transfer taxes.
P. Haans Mulder, JD, MBA, MST, CFP®
321 Settlers Road
Holland, MI 49423
616.392.1821
phmulder@cunninghamdalman.com

26. 2
• Evaluate the optimal mix of gifting and selling equity interests.
• Consider these planning options:
1. Separate out voting control and the economic benefit of the business with
different classes of equity.
2. Have the company borrow debt to fund the buy-out of G1.
3. Have G1 bought out with a seller note (i.e. using the future earnings).
4. Purchase life insurance to provide the necessary liquidity to buy-out the
inactive family members of G2.
5. Transfer business ownership to the active family members of G2 and other
assets (i.e. business real estate or personal assets) to the inactive family
members.
6. Transfer equity interest to the active family members of G2 and purchase
life insurance for the inactive family members.
7. Have the company buy-out G1 by initially gifting a small percentage to G2
and then redeeming the rest of G1’s equity.
8. Restructure the equity to have “preferred” interests for inactive family
members and “common” interests for the active family members.