Family Business Succession Planning

I’m often asked by my clients, “How do I transition my company to the next generation?”.

In order for a succession to be successful, it needs to work for both parties. Clients are advised early in our business relationship about succession planning so that they are in a stronger financial position when the time comes to transition the company. The objective is to eliminate debt and maximize their retirement so there is not a significant strain on cash flow during the transition process.

One of the first issues we discuss is what their cash flow needs are to fund their lifestyle. Once I know how much is needed to maintain their desired lifestyle and the value of their company has been assessed, I will work with them to determine how the next generation and the company can make a smooth transition.

I recently worked on a transition plan to the fourth generation (father to son’s) in which we did a combination of gifting and the sale of stock in order to make the transition cash flow. This provided the third generation the cash flow needed for their lifestyle and allowed the fourth generation and the company to cash flow the transition without overburdening the company.

Succession planning takes a coordinated effort between the shareholders, your accountant and your attorney to make the transition as smooth as possible. If you or someone you know is struggling with or is curious about succession planning, do not hesitate to contact me at or 330-453-7633.

Learn more about this post's author: Franklin Arner

My Credentials: CPA

A Little Teaser: Franklin is a partner at Hall, Kistler with more than 35 years of experience in consulting, auditing, tax and accounting services for closely held companies. He thrives on helping clients solve complex accounting problems by piecing together the "puzzle" parts…

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