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Family businesses often have different needs than other businesses, including in the area of succession planning.

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Running a family business involves intricate teamwork by a group of family members collaborating in lockstep for the good of the entire enterprise. It also requires advisors working together to address tax, legal, financial planning, insurance, governance and other issues to ensure success.

This choreography is best achieved through a planning team that includes Trust and Estate Practitioners (TEPs), qualified professional advisors who can offer guidance and provide expertise on everything from estate planning and philanthropic activities to business succession.

“Everyone has a hat to wear in helping the family business achieve its goals,” says Pam Prior, a TEP who is a Vancouver-based tax accountant and partner with KPMG in Canada. Adds William Fowlis, a TEP who is a tax lawyer and partner in the Calgary office of Miller Thomson LLP: “You’re giving objective, independent, frank advice to family business members in a holistic way.”

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Ms. Prior and Mr. Fowlis are members of the Society of Trust and Estate Practitioners (STEP Canada), an organization that promotes high professional standards among 3,000 specialists including financial planners, lawyers, accountants, tax advisors, trust officers, banking and insurance professionals.

Ms. Prior says that in setting up planning teams, “different people need to be brought to the table at different points in time,” depending on the circumstances of the business. The planning team should be aware of and sensitive to the company’s vision and mission, Mr. Fowlis says, as well as to the objectives of individual family members when it comes to matters such as succession.

Rather than each expert providing independent views, “it’s important for the team to operate as a team,” he says. On trust and estate matters, “you want to have skilled, knowledgeable professionals” who are TEPs, which can help the family avoid “traps” in the future. He notes that TEPs in Canada can also draw on the resources and expertise of the worldwide TEP network.

You’re giving objective, independent, frank advice to family business members in a holistic way.

— William Fowlis, Trust and Estate Practitioner (TEP), tax lawyer and partner with Miller Thomson LLP in Calgary

Ms. Prior says that lawyers and accountants who deal with the company’s day-to-day operations can be valuable “trusted advisors” on the team, given their deep expertise and knowledge of the dynamics and history of the family and its business. The focus should always be the family’s best interest above any other interests, such as selling a particular service or product. “A family business benefits most from advice that is independent, objective and takes a long-term view.”

Mr. Fowlis says that a planning team can include advisors with special skillsets. For example, multi-generational businesses often require someone who can “help bridge communications between family members.”

Communication among the members of planning teams is also critical to avoid “silos,” says Ms. Prior, which can bring a disconnect in the overall planning process. If this happens, businesses can end up with problematic results, such as a double tax bill upon the death of a family member because the lawyer advising the executor does not co-ordinate matters with the accountant for the enterprise.

Ms. Prior says the reason to have a range of experts on a planning team is because “you’re smarter collectively than you are individually.” She notes that its work should be revisited from time to time; for instance, the family business model may evolve, the family aspirations may change or tax rates may be revised. “It’s not one-and-done,” she says. “As we’ve seen this past year with the pandemic, you’ve got to be able to pivot.”

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Mr. Fowlis says it’s important to build flexibility into the plan rather that lock in elements that are “difficult to unwind” in the future.

He adds that it’s critical to have good relations among the group of advisors. “It’s not a contest; it’s really a team effort. You’re all trying to have the best outcome for your mutual client.”


Advertising feature produced by Randall Anthony Communications with STEP Canada. The Globe’s editorial department was not involved.

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