After Sam’s passing, Pam realized just how valuable that family playbook was. And implementing its simple steps — having all the paperwork in one place, making sure all the i’s are dotted and t’s are crossed — can help HVAC business owners prepare their spouse/family for the inevitable, ease the grieving process, and take care of them for the rest of their lives.

FAMILY PLANNING: Pam educating Synergy owners and executives on the family playbook. (Courtesy of Synergy Solution Group)

The Family Playbook

The DeAngelis were Synergy members and Pam, now retired, shared her guidance and experience on this subject at the Synergy 2022 Executive Forum to HVAC owners/executives and their spouses.

PLAN FOR SPOUSES: Pam and the spouses at the Spouses Breakfast at Synergy’s Executive Forum, where she talked with them about family planning. When Pam first joined Synergy, she started to organize events for the spouses of Synergy members, and it still continues today. (Courtesy of Synergy Solution Group)

Fortunately for Pam, she ran the business with Sam, so she knew a lot of this stuff already. But that’s not the case for every spouse. So having all that documentation ready, in one place, really is key.

Pam said the first step an HVAC business owner needs to take is acknowledging that they don’t have anything organized. The second step is to start at the beginning. Spouses need to be apprised of where the money is and who is going to be able to access it.

“Who has access to your accounts? And making sure all the accounts are dual. And if they aren’t, figure out and explain why,” she said.

After that, the second-biggest step is making sure both spouses have a major credit card in their name.

Randy Greer, president of W.L. Gary Company, Inc. in Washington D.C., and his wife were friends of Spam. But it wasn’t until Pam spoke at the Synergy meeting that Greer realized the importance and that he had to do more.

Greer’s father had things set up when he became a partner in the business 30 years ago.

“And we followed that prescription when setting up our current transition plan and have all the company documents in place. But I never thought about the fact that if something were to happen to me, my wife would have no idea what’s supposed to happen to the company or with her,” Greer said. (The first step Greer took was getting a financial planner, and sitting down with them to ensure he and his wife had all the necessary documents.)

What Could Come

Russell Fishkind, partner at Saul Ewing, focuses on business succession planning. He has experienced the litigation side that comes from a business owner who passes and doesn’t have things clear, documented, and in place for the family.

He cited Fred C. Koch, who founded engineering firms and gasoline refineries that later evolved into what is today called Koch Industries, the largest family-owned business that’s not publically traded in the U.S.

When Koch died, he owned 84% of the company. Yet, “He also didn’t create clarity with respect to who’s going to run the business [when he dies],” Fishkind said.

Consequently, the family litigated for over a decade. The case went to the Supreme Court, siblings sued over the value of the company and stopped speaking to each other, and it ultimately became a “valuation dispute.”

“Where the lawsuit claims that there was fraudulent account practices that affected the value of the business,” Fishkind said. “And that’s just one example of what happens where there’s no clarity.”

Fishkind recommends two ways to avoid situations as such: either a lifetime gifting program or, “if you’re not going to gift during your life … an estate plan.”

For estate plans in the HVAC industry, Fishkind sets up a plan for owners and once a year meets with the family members, the state planning attorney, the accountant, and life insurance agents (if applicable) to make sure everything in the plan is up-to-date.

Even outside of litigation, both Greer and Pam know others — family, industry folk, friends, etc. — who weren’t prepared and lost money, got taken advantage of, and ended up with even more heartache.

But then there are situations like Pam’s, who with her husband took the necessary steps to prepare for the unavoidable.

“Let’s face it: When things happen, no one is prepared or thinking logically. So you need to have that conversation and everything documented in writing,” Greer said.

Pam is still reaping the benefits of the gift of the family playbook (which is really, Pam said, the gift of being prepared) today and will for the rest of her life.

“Being prepared is a gift that keeps on giving. If you aren’t prepared, your family will do nothing but fail left and right. They’re going to lose out on opportunities because they’re not going to understand what you had, where you had it, and why you had it.”

It provides peace and comfort around the most tragic situation — which Pam said Sam had in his last months because he knew the proper steps were in place so Pam would be taken care of.

“I’m living proof. If you have your ducks in a row, you’re not going to wake up in the middle of the night in hot sweats knowing that you don’t know what tomorrow is going to look like,” Pam said. “I want everybody else to be able to sleep at night and know that when they wake up in the morning, everything is taken care of.”