How an interdisciplinary team help your business clients

“When we look at the survey results, the majority of business owners will tell you that they want to pass it on. But, the stats are also showing that a very, very small percentage of these businesses pass the third generation. So, there’s a bit of a disconnect, and I think a lack of planning is part of that,” said Fabiano. “Whether it’s the accountant, lawyer, or financial advisor, we all have a role to play in getting these business owners thinking about these kinds of questions.

Fabiano attributes the lack of planning to people’ fears about handling the softer issues, such as when they want to transition the business, and which child, or children, they want to take over the business. If there’s more than one child, there’s also the question of who is going to do what role and take on which responsibilities and how that will impact the family’s dynamics.

He noted that the business’s value is also tied to the estate plan as it may represent most of the owner’s wealth, so the way the owner exits matters. That’s particularly true for managing the tax bill and planning for retirement, and advisors can suggest a variety of options.

Heather Hansen, a lawyer and partner at McCarthy Hansen & Company LLP, agreed, noting that having all of that spelled out at the front end of the process is helpful at the back end of a divorce, business sale, or intergenerational transfer.

“Unfortunately, the reality is that far too often, when I meet people in my office, I’m meeting them on the wrong end, when they wish they had done that planning at the front end,” she said. “I know, as Nick was saying, these soft issues are hard conversations for clients. But, the reality is, for many Canadian families who are operating a business, we really do need to start injecting that idea of what happens if there’s a marriage breakdown into those conversation or a new generation of children is coming into the business.”

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