Successful Succession Planning

February 19, 2013Akron Chapter of the National Tooling and

Machining AssociationPresented by

James T. Stimler, Esq.OSBA Certified Specialist in Estate Planning, Trust & Probate Law

www.stimlerlawoffices.com© James T. Stimler, Esq. - February 2013

Succession Planning

Success is characterized by 4 features:1. Happiness2. Achievement3. Significance 4. Legacy“They are often competing characteristics,; [but] when you think of long-term success, it requires an element of all of these things.”

—Howard Stevenson, Harvard Business School Professor of Entrepreneurship

Succession: the process of following in order

Plan: delineation, design, method of action; procedure

11 Guiding Principles to Avoid a Failed Succession [and Estate] Plan

1. Business Owner—Know Thyself2. The Hospitals [and Graveyards] are Full of

Indispensable People3. Keep It Real!4. What’s Up Doc?5. Can I Get A Witness?6. Valuation—Ask and You May Perceive7. The Liquidity Runs Through It

11 Guiding Principles to Avoid a Failed Succession [and Estate] Plan [cont’d]

8. Environmental Maintenance Delayed Is Asset Value Denied [the Toxic Legacy]

9. What Is The Basis of That Claim?10. Stand By Your Man [or Woman or Business

Entity]11.There is No Such Thing as a Standard

Contract in the Law, So Forget Boilerplate !

Basic Considerations of Every Succession Plan

1. Focus on NET Value-Solid Business Practices2. Be Sensitive to the Identification of Buyers

and Beneficial Timing3. The Business is an Asset—Diversify4. Estate, Gift & Income Tax Considerations5. Different Rules for Different Types of

Property—Title Ownership6. Awareness of Different Types of Liability

Basic Considerations of Every Succession Plan

7. Different Ways to Designate Beneficiaries8. Related Party Restrictions9. Market Your Business in Compliance with the Securities Regulations10. Preparations for Buyer Due Diligence—Protecting Trade Secrets11. Contractual Restrictions on Transfers—Leases & Licenses