Winter 2000

  • Winter 2000

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In this issue

  • The best-kept secret in the tax code

    Perhaps the most fundamental goal of income-tax planning is tax deferral. The popular wisdom says it's better to pay later than to pay now. Many family business owners tend to believe the same principle should be applied to estate and gift taxes. Because gift tax and estate tax rates are the same, they think, don't pay gift taxes now; let your heirs pay estate taxes, at the same rates, later.

    Think again.

  • To talk or not to talk to a potential buyer?

    A man we'll call Harry Dobbs had given no thought to selling his family's business. But recently he received a phone call from a lawyer who said he had a client interested in buying the company.

    Dobbs Hardware is a very successful distributor, and Harry enjoys being its CEO. However, the call made him stop and think: “Maybe I shouldn't just say, ‘Sorry, not interested.' Maybe I should at least look at what this guy has in mind.”

  • Are you ready for the journey?

    Imagine that you had to take a five-year trip with your family, to an unknown destination where very little of your previous knowledge and experience would be of any use. Imagine, further, that your family's material wealth, its emotional well-being, and its stature in the community all depend on successful completion of this trip. Wouldn't you go out of your way to prepare your family for such a journey? Wouldn't you, at a minimum, want to give them the basic survival skills necessary to complete the passage successfully?

  • A job description fit for a king

    Writing a job description for CEOs of family companies can be a pretty elusive exercise, because so many of the chief executive's responsibilities are intangible yet critical. Basically, the CEO has two jobs: leading the business and managing the family's ownership. Let's look at the business side first. The CEO has overall responsibility for accomplishing three things:

     

    • Produce revenue, products, services, and operating earnings; maintain a good competitive position; serve various constituencies; and create wealth.

       

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