Consider a Philanthropic Trust Starting the trust planning


process early will help protect your family business assets from a sudden loss through an unexpected lawsuit or death.


Some family businesses accumulate more wealth than can be productively utilized by the next generation. Some of those assets might be put into a charitable trust.


“History shows us that successful families pass down not only wealth, but also values,” says Arlene Cogen, a certified financial planner and philanthropic leadership consultant based in Portland, OR (arlenecogen.com). “A business transition is a good opportunity to set up a philanthropic vehicle such as a donor advised fund or a private foundation. Tey allow multiple generations to work, give and serve the community together while reducing taxes.”


Start Early Starting the trust planning process early will help protect your family business assets from a sudden loss through an unexpected lawsuit or death. “Planning should start as soon as your business has assets worth protecting,” says Bill Babb, Senior Consultant at the Family Business Institute, Raleigh, NC (familybusinessinstitute.com). “You want a smooth and safe transition program in place before the death of someone in an ownership position.”


When seeking outside help to plan your trust, toss a wide net. A family business transition has implications for income and estate taxes, the protection of assets, and the outstanding agreements of banks and creditors. Because so many areas are involved, experts suggest assembling an advisory team that consists of an attorney, an accountant, a management consultant and a banker.


Having bank lenders represented is especially important. “It often happens that when a key person dies the banks get squirrely and call outstanding notes,” says Babb. “To avoid that, take the initiative long before the actual transition takes place by helping your bankers develop working relationships with whoever will be taking over the reins of the business.”


If designing a trust takes resources away from management duties, the result is worth it. “Protecting family business assets requires a commitment of time, effort and money,” says Babb. “It’s easy to procrastinate and allow the decision-making process to get bogged down. But no one has the promise of tomorrow. Te risk of delay is that your business assets go to creditors and the IRS rather than to the people you want to receive them.”


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Phillip M. Perry is an award winning business journalist with over 20 years of experience under his belt. A three time recipient of the American Bar Association's "Edge Award" for editorial achievement, Perry freelances out of his New York City office. His byline has appeared over 3,000 times in the nation’s business press and he maintains a web site at www.editorialcalendar.net.


Your business can be seen as a valuable community resource when you establish programs that help youth, education, or the homeless. Tere is no shortage of need. “Giving money away is good for business,” says Cogen. “It elevates you in the community and that tends to come back ten-fold.”


TPI Turf News November/December 2018


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