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Now the hard part. Actually, when dad and/or mom want to transfer the family business to one or more of the kids, some challenging problems arise. But, in practice, the parent-to-kid business transfer is a piece of cake when compared to any other kind of transfer/succession attempts.

Let me be specific: Your business is owned by multiple owners. For example, two or more brothers (and/or sisters) or cousins, aunts/uncles and nephews (or nieces), or two or more unrelated (by blood or marriage) owners or any combination of the foregoing. Assume the business has prospered. So have the owners. Everyone gets along fine when it comes to growing or running the business.

But mention transfer of ownership or succession planning ... silence, uncertainty, fear. Can’t agree on a price, terms, when, to whom to make the transfer or exactly what to do if someone dies, retires or becomes disabled.

Why is the above scenario so true? My 45-plus years of experience in this area pinpoints one top-of-the-pile reason: The lack of a single in-charge and in-control voice. When you have a mom/dad-to-the-kids situation, everyone knows dad (or mom) is boss. So they listen.

All the other ownership situations listed above have two or more voices of ownership. Each additional voice adds to and complicates the problems. And, don’t forget, these multiple owners have spouses — more voices — often each spouse with a different agenda than their spouse/owner.

If one of the owners dies before a comprehensive transfer/succession plan is in place, there are typically two winners: The IRS and the lawyers. Everyone else — the family of the deceased and the surviving business owners — loses.

We recently put in a succession plan for five brothers (each owning 20 percent of Success Co., which they inherited from their dad). Two of the brothers were not active in the business. Of the three business brothers, two had kids in the business, but the third brother had no kids in the business. The three brothers ran the business as a team. Unfortunately, none of the brothers was a clear leader. None of the brothers, or their advisors could come up with a satisfactory succession plan.

The process of how to solve the above problem may be more important that the solution. Following is the nine-step process, which we have been using for 27 years:

1. We requested, received and reviewed a package (the three items listed at the end of this article) of information from each brother

2. We separately interviewed each of the brothers (by telephone) to get their long-range goals for themselves, their family and Success Co.

3. We arranged an all-day meeting so everyone could be in the same room at the same time.

4. We drew a tight agenda crafted from what we learned in items 1 and 2 and by asking each brother, the company lawyer and CPA (both attended the meeting) for any items they would like on the agenda.

5. We opened the meeting by having each of the brothers recite their goals to the group. With minor exceptions the goals were true to the telephone interviews (which happens almost every time we use the process).

6. We made three lists (a) items everyone agrees to (the biggest agreed-to-item was “want the business to continue in the family”); (b) Minor disagreements and (c) Major disagreements.

7. Of course, we knew (because of our advance interviews and preparation) what would be on the three lists.

8. Next, we gave a sort of seminar on what strategies (mostly how to resolve tax and emotional issues) to use and how each strategy would fit into a comprehensive plan. The (a) items were easy (of course, we did them first); the (b) items (with one exception — it became a (c) item) were conquered without too much difficulty; the (c) items took almost half of the day. All issues were resolved during the meeting except one (there were three separate viewpoints on this issue).

9. Finally, we implemented the plan over the next two months (signed documents) while working on the one open issue. That issue (involving the value of Success Co. ) was never completely resolved, but we created a strategy to overfund (using insurance) the eventual buyout that satisfied even the brother pushing for the highest business value.

Note: : When all was said and done, we had implemented five separate wealth transfer/estate plans for each of the five brothers (and their individual families). Each of these five plans dovetailed with the transfer/succession plan of Success Co. created with the help of the nine-step process. In the end, the process solved the biggest hang-up of the brothers: How their individual goals and plans could be made to fit with their brothers’ (and Success Co.’s) goals and plans.

Are you one of the large group of multiple owners that has a transfer/succession plan problem? If so, you are invited to join the reader test to solve your problems. We will write up the results of the test and report back to you in this column.

So, if you want to participate, please send the following information by courier (send copies, do not send original documents) for each owner:

1. Personal. Your personal financial statement for you and your spouse.

2. A family tree. Your name, age and birthday. Same for your spouse, kids and grandchildren (indicate which kids are in the business).

3. For the business. Your last year-end financial statement.

Send to Irv Blackman, Multiple Owner Test, 4545 W. Touhy Ave., 602E, Lincolnwood, IL 60712.

Irv Blackman, CPA and lawyer, is a retired founding partner of Blackman Kallick Bartelstein, LLP (CPAs) and Chairman Emeritus of the New Century Bank (both in Chicago). Contact Irv at 847-674-5295 or blackman@estatetaxsecrets.com. Web site www.taxsecretsofthewealthy.com.Irv Blackman, CPA and lawyer, is a retired founding partner of Blackman Kallick Bartelstein, LLP (CPAs) and Chairman Emeritus of the New Century Bank (both in Chicago). Contact Irv at 847-674-5295 or blackman@estatetaxsecrets.com. Web site www.taxsecretsofthewealthy.com.