Original Financial Impact
- Owner founded construction business that was 24 years old.
- Couple in mid 40’s and 3 children.
- Operating agreement did not align with owner’s plans for succession, or with his personal legal documents.
- One son was involved in the business and wanted to inherit or purchase the company in the future.
- Desire to equalize the inheritances to all children.
- If the business were sold or transitioned the owner would face a large capital gains tax bill.
Original Family Impact
- The company did not have defined core values.
- Owner was leading and operating the company but had no succession plan in place if something happened to him.
- Key employees were not adequately compensated or protected.
- Little to no communication surrounding business issues and objectives.
- Several employees did not seem to be in the right roles.
- The company had no formal structure for community involvement.
- Create a business protection plan
- Align legal documents with goals and intentions
- Develop a business transfer plan
- Reduce tax liability
- Protect key-employees
- Define and communicate core values and core focus
- Ensure the right employees are doing the right work
- Enhance the business community engagement and generosity
- Created core values and purpose statement for the business.
- Equipped employees to speak into these in a way that resonated with their personal and professional purpose.
- Guided the owner and leadership team to develop a formalized vision for the organization.
- Established training and review programs based on employee strengths and growth initiatives.
- Established a leadership team to guide and speak into the future growth of the company.
- Created weekly, monthly and quarterly meeting strategies to keep all divisions communicating on key KPI’s.
- Implemented 1 on 1 time between supervisors and employees to empower employees to be heard.
- Established a corporate giving fund and invited employees to participate in giving decisions.
- Engaged employees in community volunteering and mission trips.
Solutions & Implementation
- Developed a Self-Funded ESOP strategy that significantly reduced annual income tax, provided assets to diversify investments, and transferred a portion of ownership to employees.
- Utilized a supporting organization to mitigate capital gains taxes and to increase charitable giving.
- Developed a plan to train son to take over the leadership of the business within the next 5 years.
- Developed a succession plan for the management of the company.
- Developed a buy-sell strategy for the owner’s son to buy-out his siblings upon the owner’s passing.
- Guided the owner and leadership team to develop core values and core focus, and to align the organization.
- Developed a plan to create a volunteer committee to plan and track volunteering initiatives.
Lifetime Income Taxes
Capital Gains Taxes
Case studies are for informational and illustrative purposes only and not to be considered a guarantee of results.
Actual results will vary with each situation.