A very well-written guest blog by our own Amber Atkins on the tragic loss of Detroit’s own Mike Ilitch.
On Friday, Detroit mourned the loss of Mike Ilitch, owner of Little Caesar’s pizza, the Detroit Tigers, and the Detroit Red Wings. While Mike was best known for the aforementioned holdings, his business dealings also included Olympia Entertainment, the Fox Theater, the Sound Board at Motor City Casino, and various other entertainment and food service companies.
Even my eight-year old nephew, a big hockey fan, knew who Mike Ilitch was. So it was no surprise when, on the way home from the Duel in the D Friday night, the annual University of Michigan vs. Michigan State University hockey faceoff, he asked me who owned the Red Wings now that Mike had passed.
As I attempted to explain it to him in a way an eight-year old could understand, it occurred to me that this is the perfect time to discuss business succession planning with my clients. While not every business owner runs an entity that rivals Ilitch Holdings, that doesn’t mean succession planning isn’t important. Perhaps you want to plan for your children to take over the family business. Or you want to make sure key employees have the tools they need to continue the business if something happens to you. Maybe you simply want to ensure that someone can effectively wrap things up after you are gone, including making the final payroll and accessing the business accounts.
Perhaps you are looking to put a buy-sell agreement in place, or maybe there are special considerations depending on your line of business, such as a solo doctor or attorney. Whatever your needs, here are a few key things you should know about the process:
- Do not expect the process to be quick. It can sometimes take a year or more to get the right plan in place or find the right people to succeed you.
- Do not expect the process to be easy. This business is likely your baby, and you are essentially planning for the day when someone will succeed you. It will be an emotional process, just like planning for any other aspect of your estate.
- Do not stick your head in the sand like an ostrich hoping the answers will miraculously appear before you. Waiting doesn’t make the process any easier. In fact, it is sometimes harder. Having to make these complicated decisions after learning you are ill is less than ideal.
- Do shop around before choosing an advisor. Depending on the size and type of your business, you may need a team of professionals, including CPAs, attorneys, and valuation experts that can look numerous issues, such as the tax implications of the plan you want to implement.
- Do consider insurance as a way to fund a buy-sell agreement or other succession plan.
- Do revisit your plan periodically. Just as with the rest of your estate plan, circumstances change. Perhaps your business has grown three-fold since you originally created your plan. Maybe the person you have chosen as your successor has proven themselves incapable of taking things to the next level. Or the economy, technology, or ever changing tax laws have affected your business, or there is some other, outside impact beyond your control.
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