Family Business Articles
It is never too early to plan for family succession
Ken Davidson
BDO Dunwoody LLP
May 2005, Interior Trucker & Logger
Most B.C. loggers probably don’t think much about retirement. When each day is a tough fight just to keep your head above water, who looks that far down the road? But loggers owe it to their families and themselves to be ready for when they eventually hand-off the business to the next generation.
In accounting we call such preparation “family succession planning.” Quite simply, it means lining up your affairs in advance for the day you want to lay down your tools.
You can start the ball rolling yourself by answering a few simple questions:
- Do I want my business passed on to my children?
- Does my spouse or partner agree with me on this?
- Do my children really want to take over my business; have I actually asked them about this?
- If one child takes over the business, have I provided fairly for my other children?
- Do I have a will that tells my executors what I really want to happen?
- How can I minimize the amount the government takes when I die?
- Will I have enough to live on if I sign over my business?
Don’t expect to be able to answer each question right away. A successful succession plan takes a lot of thought, and may take years to implement. What’s important is to start thinking about the answers now.
Logging is often a family-run business, like many small and medium-sized enterprises in Canada. After years of sweat and hard slogging, it’s understandable you don’t want to think about giving up the business. But you should at least talk to your family and find out where they see your business heading, and that part they want to play in it.
The next step is where your accountant comes in. Every succession plan requires some key information and other stuff to start the ball rolling:
- financial information about your business
- personal information and important agreements; other documents
- finding a qualified advisor to review the issues critical to your plans
- determine your goals, as described in the questions above
- learn about estate planning tools such as tax planning, probate fee minimization and wills
- assemble a succession team, which should include accountants, lawyers, bankers and others
All this work may seem a hassle, especially when retirement probably seems a long way off. But at BDO Dunwoody we can help. Our professionals have worked with the logging industry for decades. We know what to look for, we know what you need. We can help ensure your retirement includes relaxation and not headaches, and that your loved ones are looked after.
There’s no reason not to start planning now. In the end, you’ll feel better, and your family will thank you.
Ken Davidson is a Partner in the Kelowna, BC office of BDO Dunwoody LLP. He can be reached at 250.763.6700 or kdavidson@bdo.ca.
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