Profile: Integrating Succession And Estate Planning To Provide A Foundation For Further Growth
Our client is a successful auto dealership owner, overseeing multiple dealerships for a broad range of auto manufacturers across a number of states. As he entered his 70s, he continued to take an active role in identifying, evaluating and buying additional dealerships. When one manufacturer asked him to supply an “after-death clause” (or business succession plan) before selling a dealership to him, he realized that he had no formal strategy for transferring his business. He had always assumed his oldest son and a nephew would take over the company but thought he had plenty of time to plan for the transition.
Approach
With the auto manufacturer’s request for an “after-death clause” as a prompt, our client made business succession and estate planning a priority and asked his Bank of America Private Bank advisor for help:
- The client’s Bank of America Private Bank's wealth strategist evaluated his current will, and drew up a one-page document to show how the assets would be distributed after his passing. The client and wealth strategist immediately identified a number of problems with the stipulations (for example, it did not reflect his youngest son’s growing role in the business) and recognized the value of exploring modifications.
- Open-ended discussions about the client’s values, family, business and legacy became the basis for an integrated business succession and estate planning strategy. The client spoke frankly about hopes for family members, relatives and those business associates who had earned his trust.
- Business continuity was a crucial concern. The client asked Bank of America Private Bank to help him ensure that the dealerships would continue to be run by his operating managers after his death.
- Philanthropy was also important. The client wanted to
achieve his philanthropic goals during his lifetime, yet overseeing
his charitable endeavors had become increasingly
time-consuming.
Solutions
- With the client’s approval of a proposed plan, his Bank of America Private Bank team in conjunction with the client's attorney created a succession planning strategy that met the manufacturer’s requirements for an “after-death clause.” It provided detailed information about who would take over the business if the client died or was no longer able to manage it.
- Client created a management committee responsible for making operating decisions for the dealerships in the time between the client’s death and the eventual settlement of the estate.
- At the same time, the Bank of America Private Bank team worked with the client's attorney and developed an estate planning strategy that directed the distribution of all his assets, both inside and outside the business.
- Working with Bank of America Private Bank
specialists, the client established a private foundation, allowing
him to focus his support on the charities he valued most.
Results
After working with his Bank of America Private Bank advisor, our client:
- Satisfied the requirements of the auto manufacturer for a business succession plan, enabling him to complete the purchase of a new dealership. He went on to buy three more dealerships in the two years that followed.
- Developed a succession strategy to ensure continuity of his business and role clarity for his chosen successors, which contributed to his own comfort.
- Integrated estate planning with succession planning, providing for the financial security of a large, multigenerational family.
- Established a $50 million charitable foundation. With
Bank of America Private Bank's philanthropic specialists easing his
administrative burden, he was able to take a more active role in
making grants.
Giving Lasting Meaning to Your Wealth
With Bank of America Private Bank, you'll experience personalized attention and boutique-like private banking services combined with the vast resources from a global financial leader. Your Bank of America Private Bank advisor and your team of specialists will build a wealth plan specifically for you — aligning with your personal values and family goals. Your team helps bring the many facets of your financial life into focus to help give lasting meaning to your wealth, today and for future generations.
For more information, please contact your advisor.
This case study is intended to illustrate products and services available through Bank of America Private Bank. While based on actual experiences, certain information has been changed to protect privacy. The strategies presented are not appropriate for every investor. They do not take into account the specific investment objectives, financial situation and particular needs of any specific recipient. It is not intended to serve as investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Results will vary, and no suggestion is made about how any specific solution or strategy performed in reality, and does not indicate future performance. Individual clients should review the terms and conditions and risks involved with specific products and services. This is not considered an endorsement for any product or service offered by Bank of America Private Bank.
Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.
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