Tony Robbins, My Son & Family Business

On Wednesday night I experienced a real treat.  My hero, Tony Robbins, was signing books at Bookends in Ridgewood, New Jersey, and there was no way I was going to miss meeting him, especially since I only live 20 minutes away. At the same time, I brought my four year-old son Cal with me because I wanted him to see someone, who I think, is a truly great person.  We waited a very long time, but after purchasing a Starbucks hot chocolate (kids temperature, of course) and a Star Wars Lego set, Cal and I got to meet Tony.  We even got to take a picture together – it was fantastic!

The entire episode reminded me of the importance of family, especially since I work in a family business (like many of my clients). A successful family business is one of the greatest legacies a person can leave to a child or other trusted relative.

For my clients, it means that their life’s work continues to shine even after death. For their children, it means an opportunity for a lifetime of stable income and, with prudent management, a continuing legacy they can pass on to their children or other loved ones.

However, a family company is not like just another piece of property. Keeping your business alive and healthy through incapacity and estate administration—and ensuring the people you trust most stay in charge—takes a great deal of advanced planning and coordination.

The first step to planning for the succession of a family business has nothing to do with your estate planning documents. The nature of your business organization can dictate the process by which it passes to your heirs:

• A business operated as a sole proprietorship (that is without any formal organization) is little more than a collection of personal assets and liabilities. This can make it difficult to keep the business going during the administration process.
• If your business has stakeholders other than yourself, your right to convey your interests through your will may be limited by the company’s operating agreement, articles of incorporation, bylaws or other formative documents.
• Even if your company is formally organized and wholly owned by you, structural changes may be necessary before your can devise it in the manner you wish.

Fortunately, a skilled attorney (and financial planner) can help you fine tune both your business formation and estate planning documents to distinguish between which heirs you want to actively manage your company and which you just want to share in the income. (As a crucial aside, if you don’t know what a buy-sell agreement is, please ask us or find out ASAP because it could mean the difference between your business’s continued success and complete failure.)

Control of a family business is often a contentious issue during the probate process, so it is especially important to leave nothing to chance. Passing a family business on to your children or other relatives is a great deal more complicated than bequeathing cash, personal items or even real estate. I haven’t looked at Tony Robbins’ estate plan myself, but I’m sure he would agree!

If you require assistance planning your family business or estate administration, contact me at alec@bmcestateplanning.com or call 908-­236­-6457 at your convenience - And Happy Thanksgiving.  From my family to yours!