By Sheila Pursglove
Legal News
Attorney Michael Beals recently re-worked a legacy buy-sell arrangement between two brothers where the older sibling needed a pathway allowing him to retire from an inherited business and his younger brother needed certainty and freedom to run the company. Beals and his colleagues were able to balance those interests, freeing up the ability to effectively tax plan through trust arrangements so the business could be passed on to future generations without having to be sold to pay estate tax.
"In the process we re-worked the corporate governance and trust ownership structure between the brothers and also involved key family members and outside executives to ensure a stable organization going forward," Beals explains. "The end result is a fighting chance to succeed the business from the second generation, which is rare, to the third generation, which is rarer still."
Working with entrepreneurs is a passion for Beals, an attorney with Howard & Howard in Royal Oak who focuses his practice on corporate organization, business planning and transactions, and trust and estate planning.
"Entrepreneurs are generally driven people who are not afraid of failure," he says. "When they do fail, they get back up and go after it again. I love that determination and passion. Those are the people I can best help."
Beals can recognize himself in that entrepreneurial zeal. Five years after graduating cum laude from Detroit College of Law (now Michigan State University College of Law), he established Michael J. Beals, PC, and in 1999 co-founded Beals Hubbard, PLC.
"When I was 30, I spurned opportunities to align myself with established law firms in favor of building a business law firm from scratch," says Beals, who was educated at James Madison College at MSU. "If I had worried too much about the risks, I would have chosen a safer route. Instead I followed my passion, and thought only about success."
With his outgoing and forceful personality, most people had Beals pegged for a career as a litigation attorney, he notes. But his interest has always been business and trust law and working with entrepreneurs, a niche that has landed him in the ranks of Michigan Leading Lawyers and dbusiness Top Lawyers.
"My main motivation at the time of this decision in 1986, and which continues today, is that while I can certainly be a hired gun tasked to achieve a single result, I much prefer building a long-term relationship as a trusted adviser to my clients," he explains. "This is the essence of my make-up and philosophy as a lawyer."
Proper business succession planning is absolutely critical for any entrepreneur, Beals notes. In his own experience, a third party strategic planning process led him and partners to ultimately choose a different path, a decision that led to his partnership with Howard & Howard.
He joined the firm in 2012, and relishes the diversity of the practice.
"I'm involved on a daily basis with corporate organization matters on the one hand and business succession and wealth transfer planning on the other, as well as all areas of business and corporate work in the middle of those two ends of the practice," he says.
"There are many solid business and corporate lawyers who do not have expertise in trust and tax matters, and many competent trust and tax planning lawyers who are not skilled and experienced in general corporate and business work I bring both of these skill sets together.
"Although in some ways I miss running my own firm, the decision to align forces with Howard & Howard has proved to be a fantastic move for me professionally, my clients, and my family," he adds. "I have more resources at my disposal and am free to do what I do best practice law."
Proper succession planning starts by analyzing the end goal, Beals explains.
"The entrepreneur really needs to define where they see themselves in their business as an end result. An entrepreneur who is planning for a liquidity or sale event will make different decisions than an entrepreneur who wishes to create a legacy business. This is an ongoing process through the start-up and life of the business things change."
Beals outlines three keys to a good succession plan: (a) trust and tax planning, (b) proper corporate governance and buy-sell arrangements with partners and family members, and (c) steps to attract, reward and retain key employees.
"I enjoy this challenge because it brings all of these skill sets into play," he says.
Beals has shared his expertise by teaching a business planning elective at Cooley Law School, where he would often illustrate this work with specific case examples.
"The students loved hearing about legal theory being played out in real life situations and I, in turn, enjoyed relating the practical realities of law and business," he says.
A native of the Grosse Pointe area, Beals relocated to Oakland County after graduating from law school and he and his wife Julie and their four sons now make their home Bloomfield Hills. His leisure pursuits are golf, skiing and travel, and he and his family recently returned from a vacation in Vail, Colo.
"I'm training my boys so that when the time comes, they will be ready for the wilderness ski trips I enjoy so much," he says.
Published: Thu, Jul 23, 2015
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