Facing retirement, but not sure of the next steps for business transition?

You’ve spent your life building your business. You wear your successes and life lessons on your sleeve with pride. Yet with each ticking of the clock, you realize that time is passing by and that you must prepare for a future where you take on a different role in regard to your company as you pass the reins to your successor.

Where to start?  That’s the big question!  The idea of trying to prepare to leave something that you’ve invested so much into is tough to wrap your mind around.  Breaking it down into manageable steps can seem overwhelming.

The truth is there is that there is no cookie cutter answer.  Every business must prepare for its founder(s) to move away from an active role and for new leadership to step in.  But what this looks like for each company will be as unique as the products and services each offers.

In seeking the right exit strategy for you, there are many options to consider.  Some are better suited to your company’s specific needs than others.  Here you will find a list of four directions forward for your business on the road to a successful transition as you prepare for your retirement years.  Read more at:


Looking forward to retirement, but not sure what to do with the business?

As much as you love your businesses, you must admit that retirement is an attractive idea. You dream of relaxed mornings sipping coffee by a roaring fire or leisurely reading the newspaper on a sunny day with nothing calling us to abandon your leisure and get to work.

It can happen.  For many of us, it will happen soon.  But before we can fade into the glorious sunset of retirement, we have a job to get done.

We have to deal with the next step – what to do with the business.

Maybe you can’t yet imagine your business without you at the helm.  It’s definitely hard to do.  You’ve invested your life in the development of this entity.  But whether you have five years or fifteen years before retirement, it’s important to start putting processes in place to ease the transition from a corporation you are 100% hands on with to a business that will become the responsibility of your successors going forward.

You need to start developing your exit plan.

No two businesses are exactly the same, and the design of your exit strategy will be as unique as the service that you provide.  Here are four simple business succession concepts to consider in preparing your retirement plan.



Butterfield Schechter Receives Ranking in 2017 Edition of “Best Law Firms” by U.S. News

Butterfield Schechter Receives Ranking in 2017 Edition of “Best Law Firms” by U.S. News is pleased to congratulate Butterfield Schechter LLP on receiving a San Diego Tier 1 ranking in the 2017 Edition of U.S. News – Best Lawyers “Best Law Firms” in the area of Employee Benefits (ERISA) Law practice.

The professional excellence of the firms listed is recognized by favorable ratings from both clients and peers. Butterfield Schechter has been included in “The Best Law Firms in America©” since 2015.

The “Best Law Firms” rankings – which indicate a combination of quality practice and legal expertise in firms ranked – feature the top firms as recognized by clients and peers for delivering professional excellence and high-quality ratings.

About Butterfield Schechter LLP

Butterfield Schechter LLP is San Diego County’s largest firm focusing its law practice primarily on employee benefit plan matters. Butterfield Schechter LLP was founded in 1998 by Robert K. Butterfield and Marc S. Schechter. The attorneys at Butterfield Schechter LLP are dedicated to providing top-quality legal service tailored to clients’ needs. With a broad-based clientele, including corporations, individuals, partnerships, limited liability companies, joint ventures, qualified retirement plans, nonprofit organizations, and government agencies. Our commitment to excellent service and our combined experience fosters positive and efficient solutions for clients. The firm’s persistent effort to prevent legal problems from occurring encourages the development of long-term client relationships. At Butterfield Schechter LLP, we take pride in offering comprehensive legal assistance in the areas of estate planning, employee benefits, tax and corporate law, and ERISA litigation.

For more information, visit


Marc S. Schechter Named 2017 Super Lawyer for Fifth Year is pleased to congratulate Butterfield Schechter LLP partner Marc S. Schechter. He has been featured in the 2017 San Diego Super Lawyers list for a fifth year. This is a significant honor and a recognition of his consistent professionalism.

Mr. Schechter, who specializes in employee benefits, ERISA, and business matters, with special emphasis on ESOP transactions, is admitted to practice before the courts of California and New Jersey; the United States District Court for the Southern and Central Districts of California; the United States Tax Court; the Ninth Circuit of the United States Court of Appeals; and the United States Supreme Court. He is a member of the Employee Benefits-Taxation Section, State Bar of California; Taxation Section, San Diego County Bar Association; and a former member of the Legislative and Regulatory Advisory Committee, ESOP Association of America.

About Super Lawyers
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The multi-phased selection process includes independent research, peer nominations and peer evaluations.


Four Tips for Better ESOP Communications in 2017

Successful leaders know that effective communications are a competitive advantage.  As you begin 2017, make a resolution to evaluate the health of your employee communications. Are business goals and actions aligned? Do employees understand priorities and do they have a way to participate and share ideas?

Everyone talks about the importance of communications, but it’s just lip service without an actionable plan.   Here are four ways to achieve better communications in your ESOP in  2017.

1) Map out your communications calendar right now—Begin with a “Welcome to 2017” message. Schedule dates for the entire year now to ensure it remains a priority. Keep the content fresh with a mix of performance results, customer and employee stories, and encouragement.  We all need more of that.

2) Articulate the vision— If a customer asks an employee what your business was about, what would they say? Everyone on your team should use the same headline.  When people can connect their work to big goals, they are more engaged.  Leaders who communicate the vision and values, then put those values into action, see performance climb.

3) Use stories to make an impact—Think back to the most recent story that struck a chord with you.  Was it complicated or overstuffed with facts?  Simple stories make an emotional connection with the audience and hold their attention.  Use your own experiences to make a point.   Leaders who share a little of themselves in communications are viewed as credible and human.

4) Get visual—Visuals are processed 60,000 times faster than text.  If you rely on email as your primary form of communication, there is a better way. In 2016, there were 4.6 billion cell phone users in the world and most phones have video or photo capability. Your team members are viewing or creating visual media every day. Use photos and video as frequently as you use memos. Video is an excellent way to improve message retention, connect with remote workers, and engage senior leadership with teams.  The best part is you don’t have to have a large budget or be an on-camera pro.  If you’re sincere, it will be memorable.



ESOPs (Employee Stock Ownership Plans) can benefit you, your employees, and your company. In fact, Congress has enacted a series of remarkable tax incentives designed to encourage employers to adopt ESOPs. Of course, ESOPs are not for everyone.  Some business owners are not particularly concerned with the liquidity of their wealth or contemplating retirement and may prefer to maintain sole ownership of their company.  And some businesses may not be appropriate for ESOPs — such as companies that are unprofitable or that have only a short-term industry outlook.  But the benefits of ESOPs are by no means limited to large companies.  Most small and medium-sized businesses are well suited for ESOPs. Following are ten important tax incentives relating to ESOPs:

  1. The company’s contributions to an ESOP are tax-deductible (within applicable limits) and tax-free to ESOP participants until they receive their distribution.
  2. The income of an ESOP trust fund is exempt from federal and California income tax (except to the extent Unrelated Business Income Tax shall apply to the trust).
  3. Special IRA “rollover” provisions and special tax treatment of appreciated company stock with ESOPs can defer the tax on distributions from ESOPs to employee-beneficiaries or, in certain circumstances, permit gains from distributions in the form of company stock to be taxed as long-term capital gains.
  4. You may sell stock of your closely held subchapter C corporation to an ESOP on a tax-deferred (potentially income tax-free basis), if (a) the ESOP owns at least 30 percent of your company’s stock immediately after the sale, and (b) you reinvest the sales proceeds in securities of other domestic operating corporations.
  5. Purchase of a company can be leveraged through use of ESOP borrowed funds to purchase the target company’s stock.
  6. If your company uses an ESOP to obtain a loan, the company is entitled to income tax deductions for both loan interest and principal payments – instead of on interest payments only (as in an ordinary corporate loan).
  7. Interest rates on loans to ESOPs sometimes are less than rates for other commercial loans.
  8. Cash dividends on shares held by an ESOP of a C corporation are deductible if passed along to ESOP participants — or if used to pay off a loan used to finance the purchase of company stock.
  9. Premiums for key-person insurance owned by the ESOP are fully deductible.
  10. Cashless deductions are available through the contribution of the company’s own stock to the ESOP, freeing up dollars for other company needs.


About the author: Marc Schechter specializes in employee benefits, ERISA, and business matters, with special emphasis on ESOP transactions. Mr. Schechter is admitted to practice before the courts of California and New Jersey; the United States District Court for the Southern and Central Districts of California; the United States Tax Court; the Ninth Circuit of the United States Court of Appeals; and the United States Supreme Court. He is a member of the Employee Benefits-Taxation Section, State Bar of California; Taxation Section, San Diego County Bar Association; and a former member of the Legislative and Regulatory Advisory Committee, ESOP Association of America.

10021 Willow Creek Road, Suite 200
San Diego, CA 92131-1670
Telephone:(858) 444-2300
Facsimile: (858) 444-2345


Bring Employee Ownership to Life at your Business

October is Employee Ownership Month. Are you ready? Celebrate your employee owners and the company’s success by hosting some of these fun company-wide events:

  • Volunteer for a Cause
    Find a local service project that aligns with the company’s values and spend a day volunteering. Group service is a great teambuilding exercise and provides an opportunity for employees to connect outside of a work setting. Note: Make sure to call the charity ahead of time to let them know the size of your group so they can accommodate your team.
  • Host a Lunch ‘n Learn with a Leadership Speaker
    Ask employees to vote on a topic they would like to learn about, but give them some ideas like retirement, health, and wellness or personal development. Hire an external speaker or create a panel of employees to talk about the topic most voted. Serve lunch and people are sure to show up hungry and eager to learn.
  • Create and Compete in an Old Fashioned Field Day
    A little healthy competition never hurt anyone. Divide into teams and create reasonable obstacles and races to compete in. Everyone will enjoy the fresh air and the light competition is a great way for employees to blow off steam and bond.
  • Throw a Theme Party
    What better way to celebrate than with a party? Choose a theme like the ’80s or Hollywood, and have everyone come into work dressed in costume. Business as usual in the morning, then take the afternoon off and throw a party; provide food, games, and maybe even host a costume contest.

Employee Ownership Month provides you with the perfect opportunity to promote employee ownership. Make it fun. Be sure to acknowledge and recognize the positive contributions of your employee owners.

If you need more ideas, visit our website to view our Employee Ownership toolkit:


What Do Employees Get Out of an ESOP?

Are your employees financially prepared for retirement? Many are not, as a result, they outlive their savings and have to depend on others in their old age.

In recognition of this reality, many owners of privately held companies choose to move toward an ESOP transaction as an exit strategy from their business instead of selling out, going public, or shutting down.

These thoughtful owners choose an ESOP because, among other reasons, it allows their valued employees to keep their jobs and over time, earn beneficial value in the company.

Looking to learn more about ESOPs? Thinking about moving your company toward the ESOP model? Contact an ESOP Lawyer, Advisor, or Consultant today at

But the benefits of an ESOP to the employees does not begin with retirement. There is something to be said for pride of ownership. Historically, companies that have taken the ESOP route have had better employee retention and satisfaction. Why? Simply put – the employee now has “skin in the game”.

Having worked over the years with ESOP companies and having examined the statistics surrounding companies that have adopted an ESOP model, I have discovered the following to be true.

  • Employees feel more in control of their own destiny because they have a stake in how their job impacts company value.
  • Employees (on average) make more money than their counterparts in publicly or privately-owned companies within the same vertical.
  • Employees bring a more trusting attitude with them to work in relation to management.
  • Employees tend to stay longer in their position because of the ESOP financial incentives.
  • Employees band together to work through the difficult times instead of abandoning the company and each other. This builds community and preserves their sweat-equity investment in the company.
  • Employees enjoy greater job satisfaction than their counterparts in other systems of corporate ownership.

Want better for your employees as you transition to a new phase in your business? Contact the ESOP professionals today at