Navigating the Complexities of Succession Planning

Insights from Raymond Guy Miki, K.C.

Over the years, I have had the privilege of working with many clients that have evolved from modest beginnings to become the leaders of complex and valuable businesses. Similar to their peers across Canada, these same successful business owners have yet addressed the pressing need to consider their business succession plan and the related personal estate planning objectives.

Today, the urgency of planning continues to be particularly evident in light of the continuous, inevitable aging of our population. Many owners find themselves facing health issues or other circumstances compelling business transition and retirement discussions before they feel that they are ready to “hand over the reins” to someone else. A simple online search on the topic of the transfer of business control and inherited wealth currently under way in Canada may keep many awake at night if they have not done any planning.

So how do you begin? Consider your particular business goals and the timeline for transitioning control and ownership of the business to your successors. This necessarily involves consideration about whether your objective is to transfer control to qualified family members, other current owners, employees or unrelated third parties.

You do not have to face this alone. I urge you to take advantage of your relationship with your trusted advisors. Many successful succession and estate plans have resulted from mindful team building and collaboration amongst legal, tax, accounting, insurance and wealth advisors. Clients sometimes need a champion to help pursue their objectives and due to their established relationship with the owners, knowledge of the business and family dynamics, the business lawyer is often the best positioned to take the lead. The business lawyer can also help relieve the pressures from what can be perceived as complicated tax, accounting and legal issues and assist in navigating through any such issues alongside you in building a comprehensive and achievable plan that fits your objectives.

Comprehensive Estate Planning

Estate planning extends beyond business interests and is a critical compliment to the succession planning exercise. Each business owner should have a Will, a Personal Directive and an Enduring Power of Attorney. In case of incapacity, the Personal Directive and the Enduring Power of Attorney will address health and financial decisions. The Will does not take effect until the individual who made the Will passes away. It is critical to regularly review the Will to ensure it reflects current circumstances and reflects the intentions of that individual.

Planning for Family Dynamics and Business Succession

Clients must plan for the allocation of value to beneficiaries and consider family dynamics in their estate and succession planning. Every family is different, but in my experience and according to many writers that I have followed, involving family members early in the planning process is helpful. If family members can participate in respectful and open discussions, the likelihood of plan success will be much greater.

Key Point

Start the discussion with your trusted advisor now. You will reap immediate benefits and both you and your family will be better served in the long term if you engage now and see the process through.

Should you be interested or have questions regarding succession planning, please contact Raymond Guy Miki, K.C..

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Material in this article is available for informational purposes only and is a high level summary of the subject matter. It is not, and is not intended to be, legal advice. You should first obtain professional legal advice prior to taking any action on the basis of any information contained in this article. This article is copyright. For permission to reproduce this article, please email Swainson Miki Peskett LLP.