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Show Citizen, Free Press, Review, November 20, 1996 - Page 13 Keeping 'family1 in the family business If harder than you may realize to keep a business all in the family. In fact, many family businesses never pass into the hands of the next generation, because they are forced to open their doors to nonfamily members to raise capital and acquire management expertise. Whether or not that happens to your family business depends on a number of factors, the most important of which is a well conceived business succession plan, reports the Utah Association of CPAs. A business succession plan should address not only management succession but transfer of ownership and estate planning issues as well. The absence of a succession plan can result in a grieving spouse or child being thrust into a business he or she knows little about and can jeopardize the financial stability of your business and the financial security of your family. The challenge of management succession Although the decision to keep "family" in the family business is generally a fairly easy one, the difficult part is deciding who should be the successor. Family tradition prescribes that children should be treated equally, while business wisdom demands that a successor should be chosen based on ability, and competence experience. Therein lies the biggest problem with succession planning. In choosing a successor, experts advise that you focus primarily on the needs of the business rather than on the wants of family members. Ask yourself where the business is going and who has the leadership skills and desire to get it there. Take an honest look at each person's strengths and weaknesses. Keep in mind that the decision to work in the family business should be by choice and not by coercion. Encourage family members to recognize that joining the family business is an earned privilege and not a right of birth. The company's future profitability depends on the hard work, experience and perseverance of its owners. Timing is a critical element in any management succession plan. To ensure a smooth transition, a successor should be chosen early on, so that the founder has time to train and mentor the successor. Set a time frame for the implementation of your plan, and make every effort to stick to it. The question of transferring . The importance of estate planning and estate taxes assets are tied Proper estate planning facilitates the orderly distribution of assets to th next generation, provides for the income needs of the surviving spouse, and lessens the tax burden on the estate. Estate planning is particularly important for those with a family business, since often most of the family's up in the business. Although tax law permits individuals to pass up to $600,000 to their heirs free of federal estate tax, the rates for amounts above that level start at 37 percent and soar to 55 percent on estates over $3 million. The good news is that with proper planning, estate taxes can be the easiest type of taxes to minimize, but you're likely to need Holiday Centerpieces. a tax expert to guide you. The need to keep your plan current T I Once your succession plan is in J ; place, it's important that it be reviewed and updated regularly. Changes in tax laws, business conditions, and family situations are some of the factors that may make it necessary to revise the plan. J$. ar 5 ; United Way of Utah County has been chosen to receive $57,326 to supplement emergency food and shelter programs in Utah Valley. The selection was made by a national board charged to distribute funds appropriated by Congress to help expand the capacity of food and shelter programs in high-nee- d areas around the coun- The class meets in the Dixon Middle School, Room 104, at 7 p.m. Specializing in Insurance for: Homeowners Mobile Home Owners PLUS: A full line of quality insurance for: Auto Boats Life Business Apartments 2 Call Colby or Charelle for a FREE Quote: 756-623- 6 42 E. Main, American Fork ALE W1ATTRE Thru Tuesday American Fork 40 W. 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Under the terms of the grant from the national board, local governmental or private voluntary organizations chosen to receive funds must meet the following crit, have an teria: be accounting system and conduct an annual audit, practice nondiscrimination, have demonstrated the capability to deliver emergency food andor shelter programs, and have a voluntary board if it is a private, voluntary organization. Qualifying organizations are urged to apply. For more information, call Bill Hulterstrom at United Way of Utah County, 374-492- American Fork. . Registration may be accomplished at the school or call West When you think 222-842- The class "How to Play Piano by Ear," sponsored by the Adult Provo Cojimunity Education program, originally scheduled for Wednesday, Nov.. 20, has been changed to Thursday, 218 North , Piano class schedule changed the United Way awarded funds FLORAL ARTS ; for an optional endorsement to teach kindergarten. Students who entered before the changeover will continue under Weber's jurisdiction and receive Weber degrees. New entrants will be UVSC students. Within two years, UVSC will operate the total program. For more information about the Laralee contact program, Davenport, education adviser in the UVSC Academic Advisement Center, at education. Approval of the degree shows the Regents "recognize our need for four-yeprograms," said UVSC President Kerry Romesburg. The college presently offers bachelor's degrees in business management, technology management and computer science. The program enables graduates to certify to teach in grades one through six. UVSC also offers coursework in early childhood education enabling students to qualify Priced Right For You J UVSC to begin education program The Utah Board of Regents has authorized Utah Valley State College to take over a bachelor's degree in elementary education presently offered on the UVSC campus through Weber State University. probationDuring a three-yea- r ary period, the program admit just 30 students per year, the same number of slots as in the current Weber program.So initially, the program will serve a small share of the 400 UVSC students enrolled in & Special Thanksgiving For ChRdran, Or Excellent For Camping VJH7.? , ownership There are a number of ways you can transfer ownership of your business to others including gifts of stock, buy-se- ll agreements, trust and wills. Determining the best means for transferring ownership can be complicated and should involve an attorney and a CPA who specialize in family businesses. Keep in mind that a good succession plan separates the issue of ownership from that of management or control. For example, in those family businesses that have some children who are active int he business and others who are not, dividing the voting stock equally among active and inactive children can have serious repercussions. A suitable alternative might be to divide the company stock into two classes voting and and to provide inactive Prepare For the Holidays toSMdb & Whirlnriol with w.x .. j Natural Gas Home Appliances ( . For A Limited Time . , TT- -n OTHN Ms MTOTtfnCMM- HOMEPPLIANCES - LOArKilLS NATURAL si COURP Kitchen Aid DESIGN BY Premium Satellite System For Mom & Dad CfSl Washer & Dryer Rebates From $30 to $70 KTLA Purchase Our non-votin- KitchenAid OEE1 Homeless! EM Make your Thanksgiving extra memorable by baking a shut-in- s. pie for the homebis or qm. 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Each year the center provides Thanksgiving dinner for approximately 8,000 people. That's why several hundred pies are needed. If you would like to participate, please deliver your pie(s) to the Colonial House, 187W. Main, Lehi the day before Thanksgiving, Wed., Nov. 26 between the hours of 10 a.m. and 5 p.m. Pumpkin, Apple, and Cherry pies are preferred, but you may donate other types if you choose. For more information, 8 call Terrell Davis, after 5 p.m.. , Get 6 Months Same As Cash! non-voti- g members with stock. This arrangement allows them to benefit from the growth of the company, even though they don't have control or voting rights. . Signal $19 a month with hours free local evening 2 and weekend calling. HUTCH'S TV & APPLIANCE $50 Airtime Credit on selected rate plans. |