It’s tough to navigate family dynamics during a business transfer

By Jessica Salerno, OSCPA content manager

Family dynamics are tricky to navigate on their own, but when you factor in a family run business, they can become even more confusing.

Gary Zwick, CPA, JD, partner at Walter Haverfield LLP, knows this all too well, because he helps family businesses transfer to the next generation at the least tax cost.

His presentation at the upcoming December Mega Tax Conference, “Most Tax Efficient Methods of Transferring a Family Business to the Next Generation” will focus on planning strategies to minimize the tax impact to the family members and creative techniques CPAs can use for their clients.

For accountants, Zwick said the biggest roadblocks can be dealing with family members’ competing egos and expectations. Each situation is different, and there’s no one-size-fits-all approach to successfully transitioning the business and keeping everyone happy.

“Some families have an easy way of doing it and some don’t,” he said. “And when a parent dies it sometimes becomes a bone of contention. Some families have multiple businesses. Some kids want to be part of one business and not another, and some businesses are worth more than others.”

Although Zwick said he hopes any family conflict is resolved by the time his he’s meeting with clients, oftentimes that’s not the case. Along with guidance on how to handle differing family interests, Zwick said because the tax material is highly technical, another issue is getting clients to understand the tax process and follow through with what’s been decided.

Ultimately, Zwick said, using these techniques can help ensure accountants don’t lose their clients in the midst of particularly thorny situations.

“They don’t want to have another firm come in and take a client away because they didn’t come up with an idea to help solve the client’s problem,” Zwick said. “So this is trying to help people solve client problems and keep them happy.”