Business Succession

A good business succession plan serves as a road map, efficiently steering a company through the potentially hazardous twists and turns of transition from one owner to the next. Within this Pappas Financial division, we help the clients proactively address the various personal, family, key person, tax, legal and financial issues surrounding the transition of business ownership.

70% of all family businesses fail to survive to the second generation and 85% fail to get to the third. Business succession planning, whether simple or complex, is vital to the survival of any company. A well drawn plan will ensure the continuity and ongoing success of the business and the financial security of the owner(s) and his or her family.

The planning process is one of discussion, analysis, feedback, and revision. Working with family members, key advisors, and key employees, Pappas Financial will first help develop a Strategic Continuity Plan that will guide the company through the turmoil of dealing with the sudden loss of a business owner through unexpected death or disability. This plan will address basic operational issues and short-term financial considerations. The process then moves on to the Business Succession Plan, which anticipates the orderly transition of ownership when an owner retires. The Pappas Financial specialists facilitate this process by working with business owners and key advisors to thoroughly understand objectives, while addressing personal goals, family interests, potential conflicts and financial requirements. Issues of whether the business should be retained, sold or liquidated are discussed. We help the owner understand valuation issues and their tax implications, options for structuring buy-sell agreements, the importance of and options for funding buy-sell agreements. Depending on the situation, more sophisticated alternatives may need to be considered. These could include Employee Stock Ownership Plans (ESOP’s) or various techniques for gifting the business, such as Family Limited Partnerships, Limited Liability Companies, or Self-Canceling Installment Notes.

Succession planning is a process, not an event. Once established, a business succession plan should be reviewed and revised regularly to reflect the changing needs of both the owner and the company.

Estate Planning

The purpose of estate planning is to help individuals transfer wealth to their intended beneficiaries in a logical, orderly and tax-advantages way. Within this Pappas Financial division, we help clients develop their plan, educate them on ways to reduce estate taxes, and ultimately provide a plan to help pay the taxes.

While most successful individuals understand the effort involved in creating and maintaining personal wealth, many fail to recognize the importance of wealth transfer planning. Prior to an individual’s death, it is extremely important to have documents in place that will determine the ultimate distribution of their estate assets. There are only three places these assets can go: to their family, to charity or other designated beneficiaries, or to the government. Without proper planning, the government can inadvertently become your primary beneficiary, taking more than half your estate in the form of taxes.

With Pappas Estate and Wealth Transfer Planning, we help our clients to, first, develop a wealth transfer strategy, and second, establish the plan to achieve it. A good plan consists of strategies to efficiently facilitate asset distribution, tax reduction, and tax payment. We work to educate our clients on all the tools available to them, from the most basic (simple wills and trusts, proper titling of assets, tax-free gifting limits) to the more sophisticated (Family Limited Partnerships, Limited Liability Companies, Grantor Retained Annuity or Unit Trusts, Generation Skipping Dynasty Trusts, Defective Grantor Trusts, Multi-Generational IRA’s). Depending on the size and nature of an individual estate, charitable planning can often play a key role. We help clients find the best ways to leverage their charitable gifts to maximize their legacies.

With sensitivities to considerations involved in wealth transfer planning, Pappas Financial works closely with our clients, their families and their key advisors to thoroughly understand each situation and meet all objectives. Through diligence and personal concern, each individual client is assured ongoing protection and peace of mind.