the evolution of financial intelligence - Union Bank

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Los Angeles, CALeading Wealth AdvisorThe Private Bank, Union Bank, N.A.Joe Sweet II, CIMA ® , Senior Vice Presidentand Wealth Market ExecutiveHow can I plan for the successionof my business while avoiding conflictsbetween my sons?By Joe SweetEnsuring a successful transition for abusiness is a critical goal for any ownerand one that can be achieved with planningand communication. When the goalis to transfer the business to family members,a greater level of complexity exists, asissues of control, compensation, ownershippercentages and personal relationshipscome into play. Often, the offspring haveconflicting interests. Some want to sell thebusiness to monetize their share while otherswant to keep the business going.To navigate through these potential issues,family meetings can be productive. Withthe assistance of an experienced successionplanner, you and your family canbegin to identify and clarify the objectivesof everyone concerned. Once these objectivesare articulated, the next step is toanalyze the business’ current situation todevise appropriate wealth-transfer strategies.Each business structure poses uniquetax, operational and legal issues. A planningprofessional can assist the businessowner with some of the following:• An unbiased financial valuation toassess the company’s strengths, risks andfuture viability. Loan agreements andcovenants should be reviewed to avoid disturbingexisting lender relationships.• An impartial business valuation todetermine the business’ value in the marketplaceand potential valuation discounts.• Assessment of business agreementsfor companies with long histories. Theoriginal business agreement, especiallybuy-sell provisions, should be revised toalign with the owner’s objectives.Unfortunately, many business ownersput off succession planning, to the detrimentof family, employees and the businessitself. One recent example is acompany that had an outdated buy-sellagreement when a majority shareholderunexpectedly died. The agreement providedfor the deceased shareholder’s estateto receive an amount that far exceeded theactual market value of the business, whichhad declined due to economic conditions.The company did not have sufficient liquidityto pay off the deceased shareholder’sestate and a business loan was required tomeet the obligation.Life is unpredictable. That is why Iencourage all my clients to take action now.If you are passionate about your business,you should be equally as passionate aboutprotecting it in the event of your death ordisability. By enlisting the help of an experiencedsuccession planner, you can enjoythe peace of mind of knowing your objectiveswill be addressed, both now and inthe future.The foregoing article is intended to provide general information about business succession planning and is notconsidered financial or tax advice from Union Bank. Wills, trusts, foundations and wealth planning strategieshave legal, tax, accounting and other implications. Clients should consult a competent legal or tax advisor.BARRIERS TO ACTIONOnly 30 percent of familybusinesses pass successfully tothe second generation, accordingto the Family Business Institute.Still fewer—only 12 percent—survive to the third generation.With such negative statistics,why do business owners delaysuccession planning? Severalbarriers and misconceptions arecommonly to blame.• Many owners are so focusedon running their business today,that future planning takes abackseat, often to the detrimentof family, employees and thebusiness itself.• Owners do not understandtheir options or they think theiroriginal operating plan will suffice.An experienced succession plannercan help you understandyour options and discover potentialgaps in your operating plan.• Many entrepreneurs fear successionplanning will requirerelinquishing control of the companythey have spent their livesbuilding. The opposite is true: Awell-designed, properly implementedplan can ensure that thebusiness owner maintains control,both now and in the future.

“If you are passionateabout your business,you should be equallyas passionate aboutprotecting it in theevent of your deathor disability.”– Joe SweetI NEVER LEAVE HOME WITHOUT...My BlackBerryHow to reach Joe SweetPlease give me a call at 949.553.2521 toarrange a preliminary consultation.WHAT’S ON MY DESK…My Franklin plannerMY HOBBIES ARE…Golfing with my wife and clientsMAKE GROW LIVETHE PRIVATE BANK, UNION BANK, N.A.About Joe SweetJoe Sweet is a senior vice president and wealth market executive at Union Bank. He oversees private banking,personal trust, asset management sales and private wealth planning for the bank in Orange County, Calif.He has 38 years of banking experience and has been with Union Bank for the past 10 years. Mr. Sweet is amember of the University of Irvine Corporate Partners Board and the Mission Hospital FoundationFinance Committee Board. He received a bachelor of science degree in finance and marketing from LongBeach State University and a master’s degree in retail banking administration from the University of Virginia.Minimum Fee for Initial MeetingNone requiredMinimum Net Worth Requirement$10 millionLargest Client Net WorthConfidentialFinancial Services Experience38 yearsCompensation Method Asset-based, fixed and hourly feesPrimary Custodian for Investor AssetsUnion Bank, N.A.Professional Services ProvidedPlanning, investment advisory, money management and trust and estateservicesWebsiteunionbank.com/privateEmailjoe.sweet@unionbank.comThe Private Bank, Union Bank, N.A. 18300 Von Karman Avenue, 5th Floor, Irvine, CA 92612 949.553.2521WORTH.COM APRIL-MAY 2011093

WJoe Sweet II, CIMA®Senior Vice President and Wealth Market ExecutiveThe Private Bank, Union Bank, N.A.18300 Von Karman Avenue5th FloorIrvine, CA 92612Tel. 949.553.2521Email: joe.sweet@unionbank.comUnionbank.com/privateR E P R I N T E D F R O M®THE EVOLUTION OF FINANCIAL INTELLIGENCEAbout the Worth Leading Wealth AdvisorsThe Worth Leading Wealth Advisor admittance process is based on, but not limited to, the Advisor’s experience, education, fiduciary status, compliance record, wealth management services,methods of compensation and scope of current business. In order to be considered for the Worth Leading Wealth Advisors Program, financial professionals must be willing to provide completeand full disclosure to investors so that independent analysts from Paladin Registry can thoroughly screen and evaluate their credentials, ethics and business practices. Once admitted,Advisors pay a fee to be included. Investors and potential investors are solely responsible for the decision to select particular Advisors.