How to hit one
out of the park
Team starts with lawyer, accountant
By Grant Cameron
hen picking a team to help them prepare and
execute a succession plan, business owners
should think like baseball managers: They
need to acquire people with specialized talents
who can work together.
That’s the consensus of those who regularly deal with estate
planning and business succession litigation matters.
While planning and preparation are important elements of
any succession planning venture, assembling the right roster
appears equally important — whether a business owner is preparing to hand over the company to a family member or sell it,
be it to management or a third party.
So who do business owners need to recruit?
Accountants and lawyers top the list of essential professionals to pick up. Others include valuators, brokers, bankers
and lenders, estate planners, and insurance and
Peter Lillico, who specializes in corporate law,
estate planning and trusts at Lillico Bazuk Kent
Galloway in Peterborough, Ont. says lawyers and
accountants must be in the lineup when a business
owner has made a decision to either prepare or
carry out a succession plan.
“The first thing you need to do is identify potential candidates for a lawyer and accountant that
have the experience and expertise in the field you
work in,” he explains. “The next thing is to interview them to see if they’re on the same page that
you are and if they’re thinking the same way.
“You have to rely on these people so you want
to make sure you have the confidence in what
A lawyer is a priority, especially if the plan is to
sell the business to a third party, Lillico says, be-
cause buyers will want to see financial statements,
which will require confidentiality agreements to
And, if such a deal moves forward, he says lawyers will also be needed to put together an agreement of purchase and sale and also prepare legal
paperwork if shares must be issued or real estate
has to be transferred.
Accountants, meanwhile, will play an essential
role if plans go forward because assets may have
to be transferred from one person to another or
shares may have to be purchased, which can have
tax implications, Lillico says.
“Whatever plan you come up with, the accoun-
tant’s got to look at it and say: ‘Here’s what effect
it’s going to have on the tax consequences.’”
Professionals, such as valuators, also need to be
part of the team because they let a business owner
know what a company is worth so it can be trans-
ferred for the proper amount, Lillico says. Bankers
or lenders must be included because deals can fall
through if they’re not kept properly informed.
If, for example, the succession plan calls for a
business to be transferred to children of an owner,
“The wheels can fall off the bus quite quickly,” Lillico says.
“They [lenders] can call loans that aren’t even in arrears, so a
consideration needs to be the relationship with the banker or
lender, to bring them into the loop.”
Steven Bark, a chartered accountant from Peterborough and
co-author of The Estate Planning Toolkit for Business Owners:
Building and Preserving Your Wealth, says lawyers are a critical
part of any succession planning team because they make sure
the Is are dotted and the Ts are crossed.
A lawyer also acts as a facilitator, communicator and negotiator to get deals moving, he says, and as a transaction pro-gresses the litigator ensures that both the seller and buyer are
on the same page.