EXPO 2022 | Aug 14-17 | Bally's Las Vegas

7 questions with Lee Resnick


resnick 1Lee Resnick, partner in nationally recognized Resnick Associates, will be presenting a “must-attend” seminar for privately held business owners at EXPO 2018 (Wednesday August 22, at 11:00), helping them assure they are in the best situation with their succession and estate planning. We caught up with Lee prior to the Expo and asked seven questions about common misconceptions that many privately held business owners have as well as some of what he’ll be discussing during his seminar.

Question 1: Do you find that privately held business owners are prepared for succession?
RESNICK: Certainly some are, but statistically most are not.  Successful business owners are successful as a result of their passion, drive and commitment running and building their businesses. However, when it comes to protecting and preserving their businesses most either neglect this or they have a plan that they slapped together and then never updated it.
Question 2: If there are multiple business owners in a company, how should they plan?
RESNICK: First and foremost, they should have a buy/sell agreement, which is something we’ll discuss during the seminar.  There are different types of buy/sell agreements and it’s important to know what kind a business owner has, as the tax ramifications can be different, especially if the business is ever sold.
Question 3: What happens if a business owner doesn’t have a succession plan?
RESNICK: They are doing potential damage to their legacy.  It’s never any business owner’s intention to build a successful enterprise and then at the end of the day leave problems behind, yet that happens all too often.  It puts the family in a terrible situation – both financially and emotionally.  Conversely, if a business owner is ‘proactive’, which is a word we use a lot, then they have peace of mind that their business and family legacy will be strong. If the business owner is not proactive with their plan, the government has their own plan.
Question 4: Life insurance is often used in business succession and estate planning.  Is life insurance pretty much all the same?
RESNICK:  Not at all.  Life insurance on the surface may sound simple to understand, but in reality it’s very complex.  The correct company, policy type, policy design, ownership structure and more have be carefully analyzed and assessed prior to acquisition.  Otherwise, the business owner may be creating very significant tax problems, not to mention they may be holding a contract which will never pay out – something that will be discussed during the seminar.
Question 5: If a business owner has children that are both active and non-active in their business, what is the best way to deal with their succession and estate plan?
RESNICK: Unless it’s a unique circumstance, it rarely makes sense for any of the parties – business owner or children - to give non-active children stock in a family owned company.  There are certain estate planning techniques that can help equalize the estate and separate the business assets for the children actively working the business and non-business assets for the inactive children.  In fact, properly planning for this can also help out the business owner’s retirement.
Question 6: How important is communication in succession planning?
RESNICK: Communication is key.  It’s important for the business owner to articulate to their family and employees that there is a plan in place and share more detailed information for those that should be knowledgeable about it.  Too often business owners don’t talk about these issues and the ones left behind are put in a state of chaos and potential conflict.
Question 7: Are federal estate taxes still a concern for business owners?
RESNICK:  With the latest tax reform, business owners have been provided the highest exemption amounts in our country’s history.  Sounds good, but in actuality it may not be so great.  This, along with many other very important topics will be discussed during my seminar on Wednesday August 22 at EXPO.

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