With the downturn in the economy, many Drumheller businesses decided they couldn't make a go of it anymore. In some cases, there were younger family members waiting to take over the family business. In other cases, closures and sales were the only option.
Colin Kloot, a Drumheller lawyer with 19 years experience and partner of Herman, Kloot & Company, pointed out that succession planning is vitally important for all businesses and should be done well before the owner decides to lock the doors one last time.
"You need to identify what it is you wish to achieve, who you want to take over your business and when you want to do that," he explained. "And, along with that, you then have to try and achieve the greatest tax efficiencies. The importance of all of this is to try and achieve the least possible disruption to your business plan and the operation of your business."
If you're planning to retire in the near future and fear you've missed a crucial step, don't worry. You can take advantage of succession planning at any age or stage of life.
"Your succession planning should and could be achieved before you die, so upon your retirement. Or, gradually and until you die," reassured Kloot. "So, we always recommend that your succession planning is done in conjunction with your lawyer and your accountant."
Perhaps a hidden group of businesses in Drumheller are farms. Kloot said they too can benefit from succession planning.
"Farms should be definitely looked at as businesses. They have a massive capital base and they're often run by family members without giving thought to what's going to happen when I die or when I want to retire, what are the tax consequences, how is it going to look like when I'm no longer running the farm or my business?"
In addition to succession planning, Kloot recommended that everyone get a will (regardless of assets) as well as a personal directive, or living will.