Nickname: pat

Review: Estate lawyers drawing up plans to divide the assets in an estate often fail to recognize the differences between compensation for work and the rewards for investing. These are two separate and different activities. The father is trying to develop an equal and equitable sharing arrangement. If Jon works in the company and is paid a fair and market competitive wage for his time, skill and effort, he is receiving compensation not paid to his non-working sister for his work. If both Jon and Julia receive equal shares of stock in the company, and if both continue to maintain their investment over time, then both should share equally in the profits or losses of the business. Profit or loss is the proper return for the use of capital, wages are the rewards for work. Don't scramble the eggs.

Date reviewed: Dec 2, 2005 5:51 PM

Nickname: Ron

Review: It seems to me that if Jon gets 100% of the business and Julia gets assets equal to 50% of the value of that business (however calculated) that Jon will get twice as much as Julia. Also I would expect the adjustment to Julia's asset distribution would be 25% of the difference between current value and value at the time of Harry's retirement. This would be 50% of Harry's half of the "joint efforts" of Harry and Jon.

Date reviewed: Nov 23, 2005 7:45 PM

Nickname: whatever

Review: Whatever. It works today, but is only applicable to the future, and none of their lives will be in statis. Marriage, divorce, illness, accident, supply and demand, and attorneys can or will change the perception of fairness at disposition. Perception is individual, and will change over time. And in the end, it's all about perception. Some kids will always be greedy. Some will be selfless. No plan can compensate for it. Estate valuations are always speculative until the actual deal occurs, which may be never. In the end, the only one who will be truly happy may be Harry, who will be long gone and not have to deal with the issues. Who also paid the transition planning fees to begin with? There are no guarantees in these situations, just probabilities, and nice trys. And that's life in a private, family-owned business.

Date reviewed: Nov 23, 2005 5:16 PM

Nickname: Gus

Review: Terrific article.

Date reviewed: Nov 23, 2005 4:18 PM