Transfer the Business

Thea Lowery

Case Study

Transfer the Business

Greatness Why does your story matter?

Original Financial Impact

  • Couple in their early 50’s with 4 sons.
  • Father started a family business and ownership was passed to the client, his brother, two sisters, their spouses, and 7 members of the third generation. Including the father, there were 16 owners.
  • He and his brother were leading and operating the company but were severely undercompensated.
  • None of the nieces or nephews were interested in running the family business and his sons were interested but still in college or high school.
  • Company was filing as an S-Corp and had substantial income that was being reinvested.

Original Family Impact

  • They had “good values” but no common purpose.
  • One son was recently married, and they wanted to create a plan to bring in-laws into the family.
  • There was a desire to be more generous but little clarity around the impact the family could make.
  • Family gatherings centered on vacations and holidays and during those event’s some family stories were shared.
  • The Palmer’s desired to have more feedback from their children on their plans but had not established an avenue to facilitate these conversations.
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Growth What is the ROI (Return on Intention) of your story?

Opportunities

  • Develop a business transfer plan
  • Develop a lifetime cash flow plan
  • Reduce their annual income taxes
  • Restructure their annual income taxes
  • Restructure their children’s inheritance
  • Eliminate at least $6.5 million in unnecessary estate taxes
  • Increase charitable giving by at least $12 million
  • Develop a long-term strategic charitable giving plan
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Governance Who tells your story?

Values

  • Created core values and a family purpose statement that was memorialized and shared among family members.
  • Equipped family members and in-laws to speak into family and personal purpose.

Vision

  • Wrote letters capturing the family story and the vision and dreams for their children.
  • The family created “must haves” for the family to continue to fulfill it’s calling.

Voice

  • Annual meetings to bring the whole family together to discuss financial and relational issues.
  • Priorities and clarity for their giving focus.

Venture

  • Established Family Foundation.
  • Engaged family in volunteering to include children and grandchildren.
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Generosity How can your story create transformation?

Strategies

  • We had the client and his brother distribute excess retained earnings and convert to a C-Corp.
  • The company bought back the stock from all family members except those active in the business: the client, his brother, and their wives.
  • The company increased the client and his brother’s wages to a competitive level.
  • We developed a plan to bring the client’s sons into the business after spending time working in other industries and determined they wanted to work in the family business.
  • We utilized a self-funded buyout with a gift of stock to their sons and a Charitable Remainder Trust with the company purchasing and retiring the stock.
  • We utilized life insurance to equalize their sons’ inheritances if any decided not to be involved in the family business.

Lifetime Income

Children's Inheritance

Lifetime Income Taxes

Estate Taxes

Charitable Giving

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.