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Aug. 12, 2021

#7 Tax planning is important, but it's the easy part of succession planning - with BLG tax partner Pamela Cross

#7 Tax planning is important, but it's the easy part of succession planning - with BLG tax partner Pamela Cross

Big three Takeaways: 

1.       For owners planning for an eventual transition of the business to the next generation, it’s important to establish what their ideal outcome is, as opposed to selecting particular assets to leave certain individuals.

2.    When rules change, like 2016/2017 with the introduction of Tax on split income (TOSI) rules, having a team of professionals becomes even more valuable because they can help you make necessary changes to adapt.

3.    When it comes to structuring a business for transition, the numbers issues are much easier to solve than the emotional side of things. This is why frequent communication and voicing expectations is key.

Other Takeaways for entrepreneurs 

 4:25 - The importance of founders establishing clarity around objectives: "what do you want to see happen?"

 7.22 - The difference between treating family members equally vs. equitably

 8:58 - The importance of communication among family members

 10:39 - The importance of creating a good shareholders agreement

 12:34 - The purpose and advantages of a holding company
 
14:20 - How a Holdco can help access the Lifetime Capital Gain Exemption

 17:41 - What is a trust and why to use a family trust

 23:45 - TOSI Tax rule changes in the last five years and how Pam has helped her clients adapt

 31:20 - What is an estate freeze and why did the pandemic present an opportunity to undertake  a freeze

 35:45 - The keys to a successful family business transition
 
41:44 - Pam explain answers the question: How realistic is HBO's Succession?

 45:54 - The numbers are much easier to figure out than the emotional issues

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