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Shawn Ryan
Shawn Ryan

Bob “Bobbie” Smith had it all figured out.  

He was successful, well-regarded in his industry and had a solid 30-year marriage to his wife Barbara. His two children had recently graduated from university. 

His financial adviser thought his investments and the eventual proceeds from the sale of the business would enable them to retire soon.  Bobbie had an estate plan, with a will that bequeathed everything to Barbara, but no business succession plan.

When Bobbie died unexpectedly, Barbara was left with a business she had no interest in running. Bobbie had little life insurance, having always believed that he and the business had enough assets.

But Bobbie had been the visionary of the business. His passing left both employees and customers concerned. Some began to leave. One of the sons suggested he could run the business, but he had no practical experience.

The family lawyer suggested the business should be sold, and quickly, before the value eroded.  The accountant said the business couldn’t be sold for two years, due to tax issues that would eat deep into the proceeds of a sale.

Upon hearing of a possible sale, more employees left for the competition. The value of the business and its assets began to slide. Barbara realized she might have to sell the family cottage to support herself.

Obviously, Bobbie never grasped the distinction between an estate plan and a business succession plan.

All of this could have been easily avoided with a proper business succession plan.

Why a business succession plan sits on the shelf:

• Procrastination

• Failure to understand that an estate plan is not the same as a business succession plan

• Failure to obtain a proper valuation of the business

• Failure to integrate the business succession plan with the estate plan

• Failure to plan for the Four Ds: Death, Disability, Divorce, Departure

• Failure to identify key employees who should be part of the succession plan

• Treating a closely held business as a family rather than as a business involving family

• Failure to diversify the business owner’s net worth from the business as a whole

In our next article, senior insurance and estate specialist Shawn Ryan will discuss Scrivens’ STEP by STEP approach to business succession planning.

To learn more or to reach Shawn directly, visit or call 613-782-1122.