Transition with ease

When it comes to succession, planning ahead is everything.

By Leslie T. Snadowsky

When Creighton Stuckart, a certified financial advisor and managing partner of the Atlantic Investment Advisory Group on Hilton Head, lost his mom in 2016, he said it served as a lesson in estate planning.

“It wasn’t so much dealing with the financial issues, but it was more about the sentimental things,” he said. “My mom was an artist, and my dad had to become the arbitrator figuring out which family member was going to get which painting. All the while he was dealing with the loss of his wife, and this threw a lot of pressure onto my dad’s shoulders. It’s not a position he wanted to be in. When dealing with death or retirement as it pertains to a business or an estate, it’s largely the same thing. Planning ahead is everything.”

Stuckart has been in business with his dad, Marc Stuckart Jr., a certified plan fiduciary advisor, for the last seven years. While he said his fellow managing partner’s personality couldn’t be more different than his (Marc is more personable, and Creighton is more analytical), they complement each other. Both agree that their clients who have succession documents in place have an easier time when transferring assets in times of transition.

“You can put yourself and your plans in jeopardy when an executor, or someone who doesn’t know the business as well, or another family member who gets thrown into the position of playing referee, starts to make major decisions without all of the information,” he said.

Buy-sell 

The Stuckarts said they provide straightforward and objective financial planning solutions to coastal South Carolina families regarding wealth management, risk strategies, insurance, charitable giving and estate, retirement and tax planning. They said they are open and honest with each other, and that gives them the familial luxury of exchanging crazy ideas that often lead to great ones. Even if they disagree, Creighton said it’s a comfort to know they’re still father and son and enjoy a really strong relationship. It’s a position that lets them talk candidly about the future of their business and one they urge clients with family businesses to adopt as well.

“If you start talking today while everybody’s healthy, while death and retirement are far-off concepts, when emotions aren’t as high and you’re not dealing with a tragedy that just happened, it’s much easier and it’s much cleaner,” he said. “Having those conversations now and planning and putting things in place, like a buy-sell life insurance agreement at a relatively small cost, can give you security and alleviate worry.”

Creighton said these agreements, legal remedies for establishing clear plans on how to distribute the business shares of a departed or deceased partner to the remaining ones, also work for those who retire from family businesses. But he cautions if one gives their kids their business, they need to examine how their business is structured and consider gifting tax liabilities.

“From my perspective, as a society we don’t do a good job of facing hard realities to save our loved ones from the inevitable choices that have to be made when we do pass away or when we’re at our worst emotionally,” he said. “If it’s a retirement, it becomes a little bit easier because you’re still here to deal with it, but you’re still going to have to deal with it. There are benefits to planning ahead from a financial perspective and from an ease of transfer perspective as well.”

Wills and trusts

For complicated succession issues in multi-generational family businesses, Creighton advises turning to a professional to assess the business and suggest solutions. He said wills and trusts can prove to be optimal vehicles.

“You could have a case where someone wants to give their son or daughter a business but wants them to buy the company from them. But no one may realize the kids could be in zero position to buy a business. So now what? I think from an estate-planning perspective, wills and trusts can play a big part.”

Creighton said because wills go through a lengthy public probate process, passing along a business via a trust could prove preferable.

“If I own a business, and I’m passing it on to my kids, and I’ve done it through a will, nobody really owns the business for a year because it’s in probate. Whereas if my business is in a trust, and I pass away today and my children are able to provide a death certificate, then the way the trust is written up is how they own it. The difference is night and day regarding timing and ease of use. The obvious difference is that a trust is going to cost a little bit more to create but not enough not to do it.”