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Estate Planning - Business
The Challenge
Your father died recently, and you are now president of the family business. Over the past few years, you and your brother have built the company into a multi-national conglomerate with several thousand employees. Years earlier, your father placed 100% ownership of the company in a living trust, naming his bank as sole trustee and you as direction advisor on matters pertaining to the management of the company. Your father and his sister were equal beneficiaries of the trust. This arrangement allowed the trust to grow for the benefit of the next generation. However, your father's passing left your family without a central, patriarchal figure with undisputed authority over corporate and family matters. You want to maintain the integrity of the company while ensuring the well-being of your siblings and their families and avoiding family conflicts over the estate.
Our Solution
Hawthorn recommends implementing a company buy-back plan to preserve the integrity of your company, consolidate ownership within the family, and benefit all of the trust beneficiaries. We recommend, working with legal counsel, dividing the trust into several trusts, one for each beneficiary. Your company could then purchase stock from each of the trusts and compensate each trust appropriately if the company is sold over the next few years. Proceeds from the sale would be invested in each trust according to the objectives of the individual beneficiary.
Customer Benefit
Implementing such a plan benefits you, your family, and all of the trust beneficiaries, who could realize higher income streams, have greater control over yours and their financial destinies, and secure sound economic futures for yours and their children and for generations to come. |
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