Car Dealer Insider Jan 1, 2009
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Car Dealer Insider Jan 1, 2009

Forward-thinking dealers put succession planning on front burner

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Forward-thinking dealers put succession planning on front burner

The automobile industry may need a tourniquet to stop the bleeding and a defibrillator to revive it, but many lifelong dealers have no plans to lay their businesses to rest anytime soon. Their big challenge, instead, is trying to figure out how to pass their dealerships on to their children without being strangled by the death tax.

"You need to do an awful lot of planning - circumstances change, business changes, the marketplace changes, and buyers change too," says Jim Grecco, dealer principal of Joyce Honda in Denville, NJ. "We're going through an era we haven't seen since the Great Depression."

Even in better times, "you've got to really work with it on a day to day basis, with planning and people, and figuring out who will take the reigns if something happens. You have to leave a path so those who take over can work with it," Jim tells _Dealer Business Briefing.

Once or twice a year, Jim sits down with his CPA and tax attorney for estate planning purposes to see if he's still on target. He also works with Premium Advisors, a fee-based life insurance advisory firm, to make sure he has adequate life insurance coverage and isn't overpaying for premiums (see sidebar).

Jim, who's been in the business for over 50 years, since he was just 19, says he's glad he started his estate planning as a young man so he'll be able to pass on his business to his son-in-law and daughter - and possibly his grandchildren too - despite the death tax.

"Uncle Sam comes in - God bless him, this is the greatest country in the world and it will always be - but to give up 40 to 50 percent is extremely difficult on a family business," he says.

Jim's estate includes three dealership properties. "I have an old saying that I use: 'The annuity policy in life is... (318 of 1272 words)

Also in this Issue:

  • 2009 changes to FMLA take effect January 16 (306 words)
  • Dealers ring in New Year with expense control resolutions they plan to keep (1036 words)
  • More must-knows regarding potential manufacturer bankruptcy (607 words)
  • New Ideas (240 words)
  • News You Can Use - Dates to save, trends to watch (208 words)
  • Trend spotting (271 words)
  • You Make the Call - Tough times call for employment law vigilance (626 words)