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r 32 Oakville Braver Weekend Sunday, May 16, 1999 ESTATE PLANNING Planning succession of a family business-- a complex issue I n both my Estates practice and Corporate practice, I often encounter clients who own a fami­ ly business and wish to discuss passing that business on to their children or other family members. Planning for the succession of the family business can be one of the most emotional, as well as complex issues that a business owner will encounter. There are many legal issues, tax issues and family issues that must be exam­ ined and resolved to the satisfaction of the business owner. The owner may, after long consideration, decide not to pass on the business in favour of selling it upon his death and dividing the pro­ ceeds according to his Will. When beginning to plan, the busi­ ness owner should first consult a quali­ fied estates lawyer. It is preferable that he or she also have skill in corporate/commercial law as well. If not, you may need to bring in another lawyer who can handle these areas as well. The next person the business owner will need to consult is his accountant who deals with both his business and personal tax matters. Often one accountant or firm will han­ dle both. Your lawyer and accountant will guide you through the whole process, but at the appropriate times, you may also have to consult with an HANNA HENDERSON BARICHELLO B A R R IS TER S & SO LIC ITO R S ESTABLISHED 1974 B RIAN J. H A N N A • PAUL J. H END ER SO N D A N IEL C. B A R IC H ELLO • R E A L ESTATE • D IV O R C E • FAM ILY LAW • W ILLS /E S TA TE S • C O R P O R A TE - C O M M E R C IA L C IV IL L IT IG A T IO N : PO W ER O F S A LE , C O M M E R C IA L, P E R S O N A L INJU R Y, W R O N G FU L D IS M IS S A L 303 R O B IN S O N ST. O A K V IL L E 842-1148 TRAFALGAR LAWN CEMETERY MEMORIAL WOODS Set along the Sixteen Mile Creek, flanked by beautiful trees and I peaceful surroundings, the memorial woods is it lower cost option for non-recoverable placement of cremated remains. A central cairn prominently placed within the garden area w ill receive memorials to commemorate loved ones while serving as a focal point for remembrance. Please call us to make an appointment or for more information. G> OAKVI LLE The Town of Oakville Cemetery Services (905) 338-4236 Trafalgar Lawn Cemetery is located at Highway # 5 . just east of the Sixteen Mile Creek Bridge. insurance agent or investment advisor. The business owner will first have to devise a plan for the passing on of the business after his death. This can often be the most difficult part, depending on the relationship between family members, and how the business has been run to date. Issues of fairness between family members, needs of spouse and children, the ongoing success of the business must all be taken into considera­ tion and examined very carefully. If the business owner wants his surviving spouse to take over, is it appropriate that the spouse take over ownership of the business? The spouse may not have any qualifications or experi­ ence to run the business. He or she may want to benefit from receiving the value of the business, but may not want to be involved in ownership matters. One or more of the children may work in the business, and are being groomed to take it over. They might be reasonable candidates, but this could raise conflicts with other children who are not involved in the business. There are usual­ ly many issues of this kind that must be consid­ ered. A good idea is to have a family meeting early in the planning process to determine what the chil­ dren and spouse want or expect, and maybe to dis­ cuss the rough plan which is being considered. The owner's accountant and estate/corporate lawyer should also be present to answer any ques­ tions that may arise. It is important to try to ensure that all family members view the overall plan as fair. The spouses of children will also have to be considered. Although it is more important to ensure that the children agree with the plan, spous­ es can often be the biggest roadblock to putting the plan into effect. Remember, even the best legal and accounting plan for business succession will not be satisfactory if it results in alienation and bit­ terness between family members. The above is a general overview of some of the many issues which will have to be addressed by a business owner who wishes to plan for the succes­ sion of his or her business. One final thing to keep in mind: the plan which the business owner puts in place today may need to be changed several times prior to his or her death. It is critical that you review your plan regularly with your accoun­ tants and your lawyer to ensure that it still meets your needs. Changes in tax, trust and estate law could have a significant impact on all your well- laid plans. Submitted by Daniel C. Barichello, partner with the law firm o f Hanna Henderson Barichello in downtown Oakville. He specializes in the areas o f Wills, Estates and Corporate/Commercial Law. Reasons to draft a W ill When you consider that a basic Will can be drawn up by a lawyer for as low as $100, but not getting one could cost your family members and loved ones countless amounts of dollars, there is no reason to delay get­ ting your Will done. Many people put off having a Will because they believe they don't own enough to justify spending the money. The truth is every adult should have a Will, no matter how large or small their estate. "Is cremation less expensive than ground burial?" It can be Today, more and more people feel that cremation is a desirable alternative but are uncertain o f costs and procedures. Our brochure "Cremation: Planning & Arranging" will provide the answers to your basic questions about cremation. For a free copy send in the attached coupon or call the location nearest you. Glen Oaks Memorial Gardens Planning today for tomorrow (905) 257-1100 The Family Registry Estate Planner is a 23 page booklet which provides a place to record important information one day needed to complete final affairs of a loved one. To get your FREE copy, call Glen Oaks Memorial Gardens at 257-1100 or send in this coupon. There is no cost or obligation. Yes! I would like my FREE Family Registry Estate Planner: Name Address. City___ Province_ Telephone. Postal Code Please mail to: Glen Oaks. 3164 9th Line, R.R. #1, Oakville L6J 4Z2 "If you die without having a Will, your property Will be distributed by means of a predetermined formula according to provincial law, in essence, the government would be writing the terms of your Will for you," said John Dark, an estate planning expert from The Co-operators, "A valid Will ensures your property will be dealt with according to your wishes and with a minimum of complications and expense for your estate." Nine Reasons to Draft a Will 1. It's your property. A Will guaran­ tees that your assets will be distributed according to your wishes. 2. Children/Grandchildren. A Will provides for the care of your minor children, enabling you to choose a guardian. Should both parents die, it assures the children do not become wards of the court. 3. Without a Will, lengthy court delays could create undue hardship for your family. 4. Estate Planning. When skillfully drafted, a Will allows you to incorpo­ rate tax-saving measures and avoid unnecessary taxes. 5. By providing a blueprint and a list of directions, families will not have to speculate as to what you would have wanted. 6. Peace of Mind. A certain peace of mind comes from knowing you've drafted a Will that sets out your true intentions. 7. Your wishes are laid out carefully and legally, therefore, people are less likely to disagree with your decisions. 8. Ability to be Creative. There are relatively few rules that limit a Testator's (person who writes a Will) ability to make creative, thoughtful dis­ positions of property. 9. Supporting Important Causes. A Will assures that you can continue to help your favourite organizations, such as a charity, long after your passing. Remember, that without a Will, your lifetime earnings will be distributed through a legislated formula.