Continuing with our consideration of non-tax issues in estate planning, we turn to the reality that, notwithstanding the importance of non-tax issues, taxes are important. We will typically initiate our advice on these tax-related issues by reminding our clients that they need to think "outside the box" and leave the tax issues to the professionals. In our experience, if you let the tax issue drive the advice, you overshadow the non-tax issue at great peril to the family succession plan.

Obviously, an important initial determination that needs to be made at the outset of creating a succession plan is to decide whether or not you plan to pass the business on (to family members or a trusted employee, for example), liquidate the business, or sell the business to a third party.

Once the preliminary determination has been made in respect of the future of the business, then one needs to look at the issues from two important but separate perspectives. One from the ownership vantage point and the other from the managerial view. In family-run businesses it is especially important to separate the two perspectives and to approach the business and succession planning issues from both of these viewpoints on a separate and analytical level.

An example of the importance of separating these two aspects of decision-making is when the ownership of the business is being passes on to younger family members, yet the management is being maintained by existing non-family senior managers.