Estate planning is not an event – Three things I learned in session one

Posted on Thursday, October 7th, 2021
By Dan Beenken
 
First, I just want to thank everyone who joined us for our first session of the 2021-2022 Virtual Breakfast Series season! Chris Vernon, CEO and president of Vernon Company, and Tom Houser, an attorney at Dentons Davis Brown, presented “Dividing Family Estates Without All the Family Stress.” We had another great crowd and look forward to continuing to see you and your families at future events, including our upcoming inaugural UNI Family Business Conference presented by BrownWinick Law Firm.
 
Our panelists covered several estate planning areas including special covenants, corporate trustees, using multiple executors, share class realignment and so much more. Much discussion was spent on active versus passive shareholders. It was a really cool conversation and I hope you were a part of it!    
 
As I always try to do with our Virtual Breakfast Series sessions, I wanted to put together my top three nuggets of knowledge that I took away:
  1. Estate planning goes in spurts—be patient! Estate planning really goes hand in hand with succession planning for many families. And just like succession, it doesn’t happen in four weekly meetings over the course of a month. It takes time and happens in fits and starts. It’s not based on a checklist as much as it is the mental and emotional preparedness and the family—especially those of the current and outgoing generations, of course.    
  2. Enough to do something, but not enough to do nothing. I hear phrasing and thoughts similar to this from many family businesses that we work with. It’s a great “family values” approach that many founding generations want to see perpetuated in future family generations. How do you do it? It obviously starts as so many other things do: with dialogue. You need to have lots of communication within your family about your values and wishes for future generations. One small legal approach to help beef it up, however, is a spendthrift clause.     
  3. Consider voting and non-voting shares. This is one strategy that doesn’t often get a lot of attention. It’s a potential strategy to use for families that have a mix of active and passive shareholders. Often, we see conflict when non-active shareholders want to add their two cents to business operations topics. One potential way to stem some of that, as discussed Tom House, was in regards to creating two classes of stock. The voting shares would be allocated and controlled only by those working in the business on a daily basis. Nothing is a silver bullet to address this issue, but I really like it as a portion of a strategy to try to keep harmony.

Download the PDF below as a resource to help your family navigate estate planning. 

Visit advanceiowa.com/breakfast-series for more information about this series.