Newspaper Page Text
October 3, 1996
16
Keeping ‘family’ in the family business
It'sharder thanyou may realize
to keep a business all in the fam
ily. In fact, many family business
esnever pass intothe hands of the
next generation because they are
forced to pen their doors to non
family members to raise capital
and acquire management exper
tise. Whether ornot that happens
to your family business depends
on a number of factors, the most
important of which is a well-con
ceived business succession plan,
reports the Georgia Society of
CPAs. Abusiness succession plan
should address not only manage
ment succession, but transfer of
ownership and estate planning
issues also. The absence of a suc
cession plan can result in a griev
ing spouse or child being thrust
into a business he or she knows
little about and can jeopardize the
financial stability of your busi
ness and the financial security of
your family.
The challenge of manage
ment succession
Although the decision to keep
“family” in the family business is
generally a fairly easy one, the diffi
cult part is deciding who should be
the successor. Family tradition pre
Riot at Duke appearance
From page two
booed, hissed and laughed at
when he said that affirmative
action programs constitute “dis
crimination against better quali
fied whites.”
The debate was civil and ended
with a handshake.
When asked about the commo
tion outside, Duke replied, “Well,
most of them are communists.
They don’t believe in the United
States of America, they don’t
believe in freedom of speech.”
Some CSUN students blamed
the confrontation with police on
outsiders. Only one of the pro
testers arrested attended the
university.
“It was the off-campus groups
who wanted to get the attention.
They were just leeches, basically,
leeching onto our problems,” stu
dent Justin Scott said.
Duke, whose bid for the U.S.
Senate ended Saturday when he
finished fourth in Louisiana’s
Jazz Quiz Answers
1. Bass
2. Sat., Sept. 28, 1996
3. Wynton Marsalis
4. Sonny Rollins
5. Chet Baker
6. Both were section leaders in
the Basie Band
7. Saxophone
8. Jo Jones
9. Harvey Lee Basie
10. April, 1960 at age 88
11. Wife
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AUGUSTA FOCUS
scribes thatchildrenshould betreat
ed equally, while business wisdom
demands that a successor should be
chosen based on ability, competence
and experience. Therein lies the
biggest problem withsuccessionand
planning.
In choosing a successor, experts
advise that you focus primarily on
the needs of the business rather
than on the wants of family mem
bers. Ask yourselfwhere thebusi
ness is going and who has the
leadership skills and desire to get
it there. Take an honest look at
each person’s strength’s and weak
nesses. Keep in mind that the
decision towork in the family busi
ness should be by choice and not
by coercion. Encourage family
members to recognize thatjoining
the family business is an earned
privilege and not a right of birth.
The company’s future profitabili
ty depends on the hard work, ex
perience and perseverance of its
owners. Timing is a critical ele
ment in any management succes
sion plan. To ensure a smooth
transition, a successor should be
chosen early onsothat thefounder
has time to train and mentor the
successor. Set atime frameforthe
primary, received $4,000 for ap
pearing, as did Hicks. Students
were upset because the money
comes from a $l2O fee each stu
dent pays.
Tania Kappner, a student at
the University of California, Ber
keley, blamed police and CSUN
student leaders who invited
Duke.
“It was a real betrayal of the
student government to try and
bring the Klan here and if any
body has the responsibility, it’s
them for bringing the LAPD to
protect Duke and to attack the
students,” she said.
Associated Students President
Vladimir Cerna, who was key to
bringing Duke to the campus,
denied the allegation.
“The fact that Mr. Duke was
affiliated with the Ku Klux Klan
is completely irrelevant to the
subject,” he said. “We anticipated
exactly this type of reaction. If I
had a chance to do it all again I
would.” :
12. Play with his model train
and his Hammond Organ
13. Tenor saxophone players
from Houston, Texas .
14. Coleman Hawkins
15. Gil Evans
16. A writer and trumpeter
from Paris, France
17. Billy Eckstine
18. Tim Sanders
19. Henry Johnson
20. Freddy Hubbard
implementation of your plan and
make every effort to stick to it.
The question of transferring
ownership
There are a number of ways you
can transfer ownership of your
business to others, including gifts
of stock, buy-sell agreements,
trusts and wills. Determining the
best means for transferring own
ership can be complicated and
should involve an attorney and a
CPA whospecialize in family busi
ness.
Keep in mind that a good suc
cession plan separates the issue of
.ownership from that of manage
ment or control. For example, in
those family businesses that have
some children who are active in
the business and others who are
not, dividing the voting stock
equally among active and inac
tive children can have serious re
percussions. A suitable alterna
tive might be to divide the compa
ny stock into two classes — voting
and non-voting — and to provide
inactive members with non-vot
ing stock. This arrangement al
lows them to benefit from the
growth of the company, even
though they don’t have control or
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voting rights.
The importance of estate
planning and estate taxes
Proper estate planning facili
tates the orderly distribution of
assets to the next generation, pro
vides for the income needs of the
surviving spouse, and lessens the
tax burden on the estate. Estate
planning is important since often
most ofthe family’s assets are tied
up in the business.
Although tax law permits indi
viduals to pass up to $600,000 to
their heirs free of federal estate
tax, the rates for amounts above
that level start at 37 percent and
soar up to 55 percent on estates
over $3 million. The good news is
that with proper planning, estate
taxes can be the easiest type of
taxes to minimize, but you're like
ly to need a tax expert to guide
you.
The need to keep your plan
current
Once your succession plan is in
place, it’s important that it be re
viewed and updated regularly.
Changesintaxlaws, business con
ditions and family situations are
some ofthe factors that may make
it necessary to revise the plan.
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Awareness of childhood
cancer important
; HOUSTON
Childhood cancer is extremely
rare, but parents can have a
healthy awareness about possi
ble symptoms by remembering
the acronym CHILDREN.
“It cannot be emphasized
enough that cancer in children is
highly unlikely, with only about
6,000 cases diagnosed per year,”
said Dr. David G. Poplack, head of
the Texas Children’s Cancer Cen
ter at Baylor College of Medicine
and Texas Children’s Hospital.
“However, somechildrendoget
cancer and it’s always a good
idea to see your pediatrician if
you have concerns.”
Parents can remember the
eight warning signals of possible
childhood cancer by thinking
“CHILDREN.”
*Continued, unexplained
weight loss
*Headaches with vomiting in
the morning
*lncreased swelling or persis
tent pain in bones or joints
*Lump or mass in the abdo
men, neck or elsewhere
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*Development of a whitj
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eye
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longed tiredness :
According to the American
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among children ages three to'l ¥
“Childhood cancer can be diffi*
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symptoms are similar to othér’
childhood illnesses. Fortundté!'
ly, most children who disp;l‘a*&'f
these symptoms donot have cdfi*’
cer,” said Poplack. “Howevetfi;»’if‘
any of the eight warning sighs
persists, there could be a serious’
health problem.” L
_ Poplack advises regular medi:
cal checkups during the pré
school and school years so that’
the pediatrician or family doctor’
can become familiar with the'
child’s pattern of growth and
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