Law Tips: The Problem of Too Many Advisors in Family Business Succession Planning

Welcome back to Law Tips for our continuing expert commentary from Eric Manterfield, business estate planning practitioner, professor, lecturer and author. If you missed last week’s advice on getting your family business owners “off the dime” on succession planning, you’ll want to keep reading below after we conclude this segment.

During Eric’s participation as an ICLEF faculty member he reminds his fellow practitioners that “We need to be more insistent that our clients do the work which is required to pass the family business on – successfully – to the next generation.” A part of that work that he outlines is dealing with “the problem of too many advisers.”  I am happy to share that valuable insight with Law Tips readers:

Most owners of a family business have many advisors, including a lawyer, an accountant, a financial planner, a bank lender, an insurance professional and so  forth.  There is frequently insufficient coordination among these advisors.

We all are talking independently with the family business owner, giving him great ideas; unfortunately, we are not talking to each other. The advice we give may be inconsistent and, perhaps, incomplete because each advisor fails to take into consideration the unique perspective and expertise of the other advisors.

If the lawyer recommends an updated business succession and estate plan for the family business owners, it is not unusual for them to consult with one or more of their other advisors before proceeding.

How conversant are these other advisors in these issues? The risk we run is that one or more of the other advisors may  not understand what the client is  talking about.  Rather than admit they  do not understand, they may tell their own good clients that “You don’t need that.”

I have found that this phrase is code for “I don’t get it.” They cannot admit to the family business owners that he or she is not up to date on the intricacies of business succession and estate planning.  Rather, they shoot holes through the recommendations.

It is critical that you find out the identity of these other advisors. Who else is on the team?  Get them involved in the entire family business succession and estate planning process.

I recommend that you have a meeting of all the advisors without the family business owners present. The advisors should consider all the issues presented by the business, the owners, the tax laws and so forth, in an effort to develop a comprehensive strategy for the clients.

If the business owners were present at this “brainstorming” session, there may often be a lot of grandstanding by the advisors. If the family business owners are not there, on the other hand, a lot of that posturing seems to go away.

Of course, the clients must pay for the advisors’ work at this initial meeting; however, it may be the most productive use of their fee dollars that the business has ever spent!

I hope these family business planning sessions with Eric Manterfield have provided you with assistance on getting your clients rolling in their succession planning. Mr. Manterfield’s CLE presentation covering a wide range of issues for your business client is available through the “Best of ICLEF” video program, by Clicking Here.


About our Law Tips faculty participant:
Eric Manterfield concentrates his practice on estate planning, family business succession planning and probate litigation.  Eric is a Board Certified Indiana Trust & Estate Lawyer by TESB.  He frequently serves as co-counsel with attorneys throughout Indiana. Mr. Manterfield has created succession plans for family businesses with net worths totaling more than $3 billion.  He is a former President of the Estate Planning Council of Indianapolis and served as the Adjunct Professor of Estate Planning at the Indiana University School of Law in Bloomington for thirty years.  Eric lectures regularly before attorneys, accountants, insurance professionals and the general public on estate planning topics.  He is the author of Critical Elements of Estate Planning with Forms.

About our Law Tips blogger:
Nancy HurleyLaw Tips blogger, has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page. Also, you are encouraged to comment below or email Nancy.  She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you onLaw Tips.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Leave a Reply