In this issue
A generational transition is a critical point in the life cycle of a family business. All too often the senior-generation leaders believe they have a foolproof succession plan in place, but problems arise when the time comes to pass the torch.
Here are just a few of the ways a succession plan can go wrong, along with some troubleshooting advice.
1. The viewpoints of all parties are not considered.
From the moment the 2001 tax bill was enacted there was considerable uncertainty about what would happen come 2011, when the ten-year life-span of the 2001 law was scheduled to have run its course. Although it took Congress and the President until the third week of December 2010 to hammer out the rules, the changes to the federal estate tax and gift tax law made by the new 2010 tax bill represent a substantial liberalization of the law. This will give a big assist to many succession plans.
If Mabel Williams hadn’t singed the hair off her eyebrows and lashes in a 1915 kitchen fire, there would be no Maybelline eye makeup today. Using a technique she had read about in Photoplay, Mabel mixed ash from a burnt cork with coal dust and Vaseline, then applied it to the missing brows and lashes. One of her brothers, Tom Lyle Williams, was fascinated by Mabel’s concoction and the way it enhanced her eyes. Tom Lyle, a movie buff, realized at that moment that glamour in those early days of Hollywood radiated from actresses’ eyes.
Do you know the true value of your business? Valuation specialists can provide you with a range of multiples based upon a pretty good set of industry data. But what is your business really worth? It may not be as much as you think!
Why is this? The answer may involve your “hit by a bus” plan. Has it been battle tested?
Divorce—the disintegration of a marriage and family—is devastating. The separating spouses and their children suffer emotional trauma, and the family’s finances undergo serious strain. There are now two households to support, rather than one, and the process by which the family’s assets are distributed is often contentious.
Lawsuits involving the family members who own a family business are notorious for wasting money and energy. This waste could be avoided if the parties had a better understanding of the litigation process and set goals that are realistic and achievable.
Seven hundred years ago, the Frescobaldis began making wine in Tuscany. Over time, their high-quality wines became known in Italy and throughout Europe. They even counted Henry VIII as a customer.
Marquis Leonardo Frescobaldi, current president of the Marchesi de’Frescobaldi Corporation, the family wine business, credits his family’s continued success to a mix of good fortune, education, commitment and a tradition of innovation.
Students at Stewart Home School, like those at any other private boarding school, are busy with academics, friends, field trips and sports. But at this school, all the students are intellectually disabled men and women.
Dr. John Quincy Adams Stewart, who founded the school in 1893, wrote extensively on educating the intellectually disabled and headed the state institution in Kentucky. Eventually, he opened a private, for-profit school for 13 students on the 850-acre grounds of the former Kentucky Military Institute, near Frankfort, Ky.