Situation and Objectives:
- Sharon (53) and Tom (57) are husband and wife co-owners and officers of a specialty electronic component manufacturing company with $13 million in sales.
- Sharon and Tom both receive salaries from the company as well as rent for the lease of 2 business real estate properties, which they own personally. They also own 4 other parcels of valuable real estate: their primary residence, a vacation home and 2 local mixed use warehouse/office properties.
- They have 3 married grown children: Alex, Barb and Charlie. Alex is actively involved in the business. Barb just came back to work for the company after a several year stint with an unrelated business she co-founded with a couple college friends. Charlie works in the music industry.
- Treating all their children fairly was an important concern.
- Sharon and Tom are now confident that they can safely leave the business while maintaining family harmony and financial security…
- The company created a strategic vision and process for executing it, allowing the family to work together to set future direction, and protect Sharon’s and Tom’s legacy and business value.
- By evaluating and developing the leadership and management skills of Alex and Barb (the children who are active in the business) and non-family key employees, the risk of failure was minimized and family stress reduced.
- Sharon and Tom were able to transfer the business to Alex and Barb for the “lowest defensible value”, assuring that taxes would be minimized.
- The process insured that Charlie (who was not active in the business) would be included through the use of non-business assets.