Make Family Business Asset Protection a Priority

If you’re like most family business owners, you want to protect your business and ensure that it stays in the family, but you’re not doing enough to safeguard its future.

About 78% of respondents to PwC’s 2023 Family Business Survey say that their business is their family’s most important asset, and 72% want to ensure the business stays in the family. And why wouldn’t you? Chances are you’ve significantly sacrificed to get to where you are today, and you’d love for the next generation to take what you’ve built and run with it when the time is right.

But year after year, the survey reveals that intentions and actions regarding family succession planning don’t always align. Sadly, most family businesses do not have a strong, documented, and communicated succession plan. Many don’t even have critical documents in place. These include shareholder agreements, family employment policies, entry and exit provisions, dividend policies, emergency and contingency procedures, and conflict resolution mechanisms. In fact, only 64% of family business leaders have the most fundamental asset-protection document in place: a last will.

If you recognize that you’re missing some of these critical documents, take steps now to remedy it. It’s incredibly difficult to save a family business after the founder’s death, in particular, when many of these documents are absent.

It also pays to communicate both about these bigger-picture plans and day-to-day concerns. Only 49% of PwC’s respondents said their family aligns on the company’s direction. About 65% say they invest time in understanding family members’ concerns, and 57% say they define clear expectations for family members. That leaves a gaping hole where mistrust and misunderstanding can fester.

“There is a correlation between trust, communication and performance. Our survey shows that respondents who have higher levels of trust report fewer conflicts, and those who have agreed values written down report higher levels of growth in the past 12 months,” the study authors write.

We often tell clients that exit planning and succession planning are similar. Whether you plan to sell the business to an outside buyer or employees or intend to pass it down to family, preparing the business for that transition takes years. Here’s why: Protecting assets through a transition takes a combination of tax minimization strategies, business financial planning, estate planning, industry comparisons, and sometimes restructuring of the business and even forensic accounting to uncover mysteries that could derail future moves.

All of this takes time and thoughtful consideration. And if you’re doing it for the benefit of your heirs, it’s essential to include them early on so that they understand the reasons behind the decisions you make.

One final asset protection note: We noticed a focus on cybersecurity as part of the survey this year. What does cybersecurity have to do with family business succession? Accenture has found that nearly 43% of cyberattacks are on small and medium businesses, including family businesses. Those attacks can cost family businesses hundreds of thousands of dollars. A longstanding statistic is a scary reminder of how serious it can be: 60% of companies go out of business following a significant cyberattack. That’s why the IRS considers cyberattacks one of the biggest threats against small businesses.

Going back to PwC data, just 40% of respondents say they are very advanced in effectively responding to and addressing data/privacy breaches. It’s a reminder that asset protection isn’t what it used to be. Emerging outside threats and opportunities can make or break your succession plans in an instant. Doing “what we’ve always done” is rarely the best answer. Feel free to contact us with questions.

Image Copyright: rawpixel

November 28, 2023

Client Spotlight

A terrifying home invasion involving men with masks and guns set Pam Wood on an unexpected path to business ownership in 1981….
What happens when you combine a passion for creating, a knack for business, and deep family values? For Scott Klingler, owner of MergeWorks, it resulted…
Bessie M. Irizarry loves embracing a good challenge. It’s one of the many reasons she’s earned respect as a female engineer and business owner in…
San Antonio native Mark Lopez can’t recall a time he didn’t envision himself following the footsteps of his father, a project manager, into the construction…
Siew Pang knows that the key to unlocking the American dream can be discovered by embracing unexpected opportunities….
If you’re a San Antonian, you may not want to imagine your weekend without brunch at the city’s beloved Magnolia Pancake Haus….
Greg Thompson has long respected money and how it can catalyze greater things….
You may not be aware of it, but Don Lasseter has helped you throw a party. How do we know that? He’s the franchise owner…
Land surveyors aren’t known for exceptional customer service. But why shouldn’t they be? David Breaux set out in 1998 to prove that treating customers right…
When Lance Rose sees a business need, he fills it. That’s how he and Terri, his wife of 30 years, have evolved into the proud…
Matt and Lara Bruhn met while in graduate school at Harvard. He served as an officer and F-15C pilot with the U.S. Air Force….
Growing up in Piedras Negras, Coahuila, Mexico—just south of Texas along the Rio Grande—Oscar E. Flores dreamed of becoming a designer….

Blogs and Articles

$125,000 Business Inventory Tax Exemption Heading to Texas Voters

$125,000 Business Inventory Tax Exemption Heading to Texas Voters

Read More

Beware of Modern Ponzi Schemes

We’ve entered a new era of Ponzi schemes. A record number of the scams have been estimated in 2023 alone, an amount that doubled in...

Beware of Modern Ponzi Schemes

Read More

Bankler Partners, LC, Expands into a New Name and Space

This is a pivotal moment for our firm. The transformation to Bankler Partners and move to our new, modern space represents our dynamic growth and...

Bankler Partners, LC, Expands into a New Name and Space

Read More

Digital Assets and Your Taxes

You may have reveled in the Wild West days of cryptocurrency and other digital assets, but we’re entering an era of meticulous record keeping and...

Digital Assets and Your Taxes

Read More

The Goldilocks Rule for Tax Withholding

If you’re like half of Americans this year, you are more dependent on your tax refund to pay for necessities than you have been in...

The Goldilocks Rule for Tax Withholding

Read More

How Inherited Assets Affect Your Taxes

Inheriting assets can be a financial blessing, but it also raises essential tax questions that many heirs overlook. How you manage those assets can have...

How Inherited Assets Affect Your Taxes

Read More

Getting Hit by Someone Else’s Bankruptcy

Finding out that another business or individual who owes your business money has declared bankruptcy can feel like a kick to the stomach....

Getting Hit by Someone Else’s Bankruptcy

Read More

Welcome to Texas: Cutting Tax Ties with Your Previous State

San Antonio is currently one of the fastest-growing metro areas in the nation. If you’re among our new residents, welcome! Before you enjoy the tax-friendly...

Welcome to Texas: Cutting Tax Ties with Your Previous State

Read More

Reaching the Unreachable IRS

Reaching the IRS has always been challenging. With the IRS workforce reduction continuing, many believe your odds of reaching a warm body to resolve a...

Reaching the Unreachable IRS

Read More

How Is Costco Gold Taxed?

Gold, silver, and other precious metals have emerged as standout assets in today’s unpredictable economy due to their ability to remain somewhat independent from stock...

How Is Costco Gold Taxed?

Read More

Yes, You Do Still Have to File Taxes

Early filing numbers are measurably down this year, data security concerns are high, and IRS staffing is in disarray. But if you’re considering scrapping it...

Yes, You Do Still Have to File Taxes

Read More

Retirement Plan Perks for Texas Small Businesses

Retirement Plan Perks for Texas Small Businesses

Read More

Top 6 Worst Social Media Tax Tips

Top 6 Worst Social Media Tax Tips

Read More

What’s Happening with the Corporate Transparency Act?

In March 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule removing the requirement for U.S. companies to report beneficial ownership information...

What’s Happening with the Corporate Transparency Act?

Read More

Love & Marriage & Your Business Assets

Love & Marriage & Your Business Assets

Read More

Now Accepting New Clients

Let’s Start the Conversation

Let’s take a look at your finances together. We offer a complimentary 1-hour call to review your past tax returns. If we see a way to help you, we will.