high percentage of family business owners have also
failed to gauge their potential tax exposure and are
unaware of the domestic capital gains tax or inheritance tax liabilities they may have accrued.
These are complex issues in and of themselves. As
part of succession planning, they become complex
issues linked to other complex issues. In their new
book, On the Shoulders of Atlas: A Story About Transitioning A Family-Owned Business, the 10 authors
noted that if a family business is being sold then a
law firm experienced in sale transactions is required.
The 135-page book tells the story of Victor Banks,
the founding visionary behind Atlas Plastics who
grapples with family conflict and the complexities
of tax and financial planning as he creates a strategy
to ensure the success of his business. The authors,
in telling Victor’s story, “emphasized that complet-
ing a sale transaction was intensive from a legal per-
spective…An experienced transaction lawyer could
better anticipate issues and help provide solutions.”
Anticipating issues is second nature to lawyers,
said McDonald. “We can propose options about how
things can be done. The lawyer’s mind is trained to
look at worst-case scenarios.”
“Lawyers have also worked through disputes,”
she added. “There is a lot of emotion wrapped up in
these issues. When there starts to be suspicions, it
can be very difficult.”
Advisors, like accountants and lawyers, can ease
that difficulty—especially if they are singing from
the same song sheet and jointly guiding the client.
“What it needs from each advisor is a certain degree
of humbleness. There can’t be a lot of ego in the
room,” said Khan.
“You need collaboration to debate issues the
owner will not have been thinking about…People
have to work together with common goals and objectives,” he added.
They also have to be attuned to what are often
called the softer issues, the emotional connection to
the business, the competency of the successors, and
the willingness, or lack thereof, to relinquish con-
trol. “The non-business issues are very relevant,”
noted Gary Shiff, a legal partner with Blake, Cassels
& Graydon LLP in Toronto. “They can change what
you think should be done.”
There is certainly a lot to be done: sale transactions,
shareholder agreements and ownership papers. “Ul-
timately, these are legal documents, and they need to
be able to stand up in court,” stressed McDonald.
“You have to look at the performance of the fu-
ture and current owners,” said Shiff. “You want to
protect wealth for the future.”
That protection starts with the team—and the
client—coming together. “Nobody has all the an-
swers and nobody can practice in all areas,” said Khan.
“Each one of the advisors only has a partial picture
that the owner needs to get the bigger picture.”
In certain situations, he added, a third-party fa-
cilitator may even be needed. “They can help the
team and help ensure an open dialogue. A succes-
sion plan can be short term, but typically it’s going
to be a five- or 10-year plan. Everybody needs to be
part of that investment.”
The facilitator can unite the group and bring it
closer to resolution more quickly. “The facilitator
will have experience in dealing with family matters,”
said Khan. “They can bring a whole different per-
spective to managing those issues. It, hopefully, puts
people at ease.”
If there is no outside facilitator, a member of the
team usually takes on the role. Who that leader
will be is a fairly natural decision, said McDonald,
pointing out that it is often the advisor with the
longest relationship to the client or the person who
brought the other team members to the table who
takes the helm.
