Prioritizing Succession While Growing a Business
Growth, Legacy, and Family.
Overview
For over 25 years we have manufactured and distributed high end, custom chairs across the globe. We had also invested heavily in real estate and other local business to help build infrastructure and employment possibilities in an otherwise declining small Ohio town. My children and eventually their spouses were involved first in our foundation and eventually in the business. David and Matt continued to encourage our family to complete a business succession and estate plan. To be honest that was not something I wanted to work on.
Benchmark pushed me to think deeply about the future. I was spending my time running a business. I truly did not want to deal with the possibility of my death. These are really tough decisions. How would it impact our family?
I could not stop thinking about questions they asked like Who would run this company I founded if I am gone? How will you prepare your children to lead the business you started? One thing I did realize was my deep concern about the impact of estate taxes on my family and our business.
Objectives
Key Challenges
The last 5 years have been a whirlwind! Where had the time gone? Our business had grown rapidly, we expanded internationally and the leadership at the company is comprised mainly of family members. Despite building a strong team David and Matt kept asking me about the inevitable…my death or disability.
It was clear that our estate planning documents were out of date and likely did not consider all the changes at the company and within our family. Benchmark strongly encouraged me to more fully consider our charitable intent and potential changes in estate tax laws.
Important Questions
“If I died prematurely, how would it impact the business and my family?”
“Who would run this company if I am not here anymore?”
What is the tax impact if I transition my business?
We Step In...
Results and Impact
Actionable & thoughtful planning
We have a plan! Actionable and thoughtful planning that gives my wife and I tremendous piece of mind knowing our wishes will be carried out and our legacy in the community will be preserved. We started a community theater and funded a kitchen to serve the elderly and marginalized in our home town! We have successfully integrated a tax efficient transfer of ownership of a portion of the business to our children and future generations! Our passion for our community will never go away and with Benchmark’s help we set up tax efficient vehicles to fund and support our family foundation. Despite my health challenges we completed a comprehensive risk management review and a portion of our succession arrangements are funded with life insurance policies on my life.
Evaluation Process
As we have considered acquisitions and frankly being purchased the entire Benchmark team has become an integral part of our evaluation process. Benchmark also coordinated with our CPA’s and Attorney’s as well as potential Private Equity partners. They completed an independent evaluation of our executive and employee benefit plans and walked us through the process of switching 401k providers! Not only does our family love the Benchmark team our employees do as well. Under their guidance we completed a Buy-Sell agreement and developed a plan to pass ownership to the next generation over time. The approach allowed our family to save on gift, estate, and generation-skipping transfer taxes. Initially we gifted a small portion to your children. In the long run Benchmark helped us build a plan that helped us manage risk, minimize tax and protect my family for generations.
Charitable Foundation
We invested every penny into the business. I never thought about a nest egg for me and my wife. David and Matt set up a savings/investment plan for me to invest in myself and our future! We started small but you should see us now!