Family Business Trust

Business Success

Usually, it takes years of work to develop a successful business. Most owners spend most of their time planning and protecting the business for the short term, and delay long range planning and protection. This may be the only way they can spend their time to get the business up and running and define their operations.

Exit Plan

The next step must be long range planning. This includes, cash flow, products and services, profit margins, asset protection, record keeping, evolving with the marketplace, and eventually an exit plan.

Since we all exit at some point, a decision must be made as to the best way to exit the business. Some options are sell the business, transfer the business, or close. The question is what is best?

Basic Plan

That's where the trusts come in. In essence, once you transfer assets into the trust, they're controlled by the trust (that is controlled by you). Whatever exit plan you installed, can then be activated without court supervision, without interruption.

At your death, the business and assets stay in the trust, to be distributed by the trustee (that you selected), rather than by the probate court or government administrator.

Normally you will already have determined that a sale is best or that you have decided to liquidate, or transfer to the new management team. Sometimes, business owners leave that decision up to the designated management and successors. Perhaps even getting advice and guidance from the beneficiaries.

Power is Different than Benefits

The designated managers of power are the decision makers. The designated beneficiaries have no power, except to receive their benefits at the whim of the power managers.

If the Trustee decides to make distributions for example, those can go to your designated heirs right away, without the delays of probate.

Business Value

The value may only be high because of the work, your experience, your skills, and investment of establishing the business. That may not be very high, if those items are not present, or can't be transferred, or can be bypassed.

For instance, a prospective buyer may feel that he cannot get quality services or experience, if the key employees are not participating. He may feel he can eliminate the startup expenses by starting a new business without paying for your startup expense.

Then again, the value may be in the loyal customer base, the referrals, the monopoly of the services or products you sell, or the highly recognized trade names, logos, and copyrights that you have promoted. Even the website could be significant additional value.

An appraised Business Valuation, or a few comparable Estimate of Value from business brokers would be very worthwhile, and assist you in the decision process. Even if you disagree with the valuation, you will at least get some reality of the opinions of others.

Sale of the Business

Selling a business is unlike selling a home or vehicle. You will find a variety of buyers: the unqualified, the over-qualified, the owner-worker, the family owner-workers, the investors, the mergers, the liquidators, the corporate empires. A sale could take a long time and require assistance, perhaps an agent that specializes in your type of business.

Business Succession

If there is experience, ability, and excitement to keep the business in the family; then it is only a question of how to get it done safely, with high expectation of continued success.

Transferring your business between generations can be a stressful time. Professional Trust Services can help you through this process. Our experienced staff will help your family with the following:

Interview and gather all family data
Establish family council to help develop mission and define goals
Work one-on-one with business managers and family to achieve goals
Work with tax and legal professionals to make sure all aspects are covered
Look at life insurance and various matters associated with the transfer
Look at key man prospects and retained employees
Look at licenses and laws associated with the transfer
Help create a legacy by helping to incorporate family values in the plan

Succession Planning Preparing younger generations to undertake key roles when you are gone is important. Charter Trust will help your family develop a support team of family members and professionals. Along with providing ongoing mentoring to the younger generations and key integration with the elders, we will help assign roles, reduce future risks and help carry out the vision and mission of the family.