Uncertainty can follow grief when small business owner dies

When Jim McLaughlin died suddenly from a heart attack at age 64, his family assumed they would have to close his homebuilding business. He'd made no plans for someone to succeed him at McLaughlin Construction, and there was no employee who could step in and take his place.

But as McLaughlin's son-in-law, Chris Carr, started to wind down the Sea Isle City, New Jersey, company five years ago, he realized it was worth keeping open and that he, an accountant, should try to run it.

"The main issue I had to deal with was, how in the world could we convince customers that it's a good idea to build a house with a guy who was an accountant 30 days before this," Carr says. Working with his wife Kristy, he also had to reassure employees and contractors worried about their livelihoods, and encourage them to stay with the company.

In this Wednesday, June 5, 2019, photo, Chris Carr, president of McLaughlin Construction Management, poses for a photo in Sea Isle City, N.J. When Jim McLaughlin died suddenly from a heart attack at age 64, his family assumed they would have to close his homebuilding business. But as McLaughlin’s son-in-law, Carr, started to wind down the Sea Isle City, New Jersey, company five years ago, he realized it was worth keeping open and that he, an accountant, should try to run it. (AP PhotoJulio Cortez)

Many small business owners have no plans for what will happen to their companies when they die. The spouses, children or other relatives who step into the breach have to quickly learn the business, sometimes after sorting through haphazard records, and, as Carr did, try to win the confidence of staffers and vendors.

Surveys taken by banks and insurance companies in recent years found that most owners haven't created what's known as a succession plan that provides for who will own and run a business after the owner's death. But even those who have plans may not have written them or communicated them to anyone — including their chosen successors.

"They don't want to think about it," says Jillyn Hess-Verdon, an attorney based in Newport Beach, California, who does estate and succession planning. "Most of my clients spend more time planning a two-week vacation than they do the succession of a business."

In this Wednesday, June 5, 2019, photo, Chris Carr, left, president of McLaughlin Construction Management, poses for a photo with his wife Kristy Carr in their office in Sea Isle City, N.J. When Kristy's father Jim McLaughlin died suddenly from a heart attack at age 64, his family assumed they would have to close his homebuilding business. But as McLaughlin’s son-in-law, Chris, started to wind down the Sea Isle City, New Jersey, company five years ago, he realized it was worth keeping open and that he, an accountant, should try to run it. (AP PhotoJulio Cortez)

At McLaughlin Construction, the transition was eased by the fact Jim McLaughlin kept good records. But as is the case at many small companies, he was the business; his personality and track record were what brought customers in. As Carr talked to employees and contractors, he got up to speed and ensured that the projects underway were completed. He then had to convince prospective customers he would deliver the same service and quality McLaughlin did. It took three years before he felt the business was back on the trajectory it had before McLaughlin's death.

Succession planning involves legal as well as practical issues, Hess-Verdon says. When there isn't a plan, family members can end up fighting over a company in court; the ensuing time, money spent and strife can distract from running the business. In partnerships, the battle can be between the family and the surviving partner or partners.

"It can be really damaging to the asset itself," Hess-Verdon says.

In this Wednesday, June 5, 2019, photo, Chris Carr, left, president of McLaughlin Construction Management, poses for a photo with his wife Kristy Carr in their office in Sea Isle City, N.J. When Kristy's father Jim McLaughlin died suddenly from a heart attack at age 64, his family assumed they would have to close his homebuilding business. But as McLaughlin’s son-in-law, Chris, started to wind down the Sea Isle City, New Jersey, company five years ago, he realized it was worth keeping open and that he, an accountant, should try to run it. (AP PhotoJulio Cortez)

The business can also suffer when practical matters aren't dealt with before a death. For example, if the person or people who take over the company's operations need to be licensed and aren't, legally they're not allowed to be running the business, Hess-Verdon says.

There can be unpleasant surprises. When Randy Hansen was about to have a bone marrow transplant as he fought leukemia, he wrote down some basic information about his agricultural business and gave it to his wife, Sandy. Hansen thought he'd be OK, but three months later, in January 2003, he died at the age of 34. Soon after, his wife discovered that AgVenture Feed & Seed was close to bankruptcy; there was a bad farming economy at the time and Hansen had just bought out his former partner, burdening the Watkins, Minnesota, company with debt.

"He was a typical entrepreneur who didn't have a lot of policies written down," Sandy Hansen-Wolff recalls. "I feel like I went on a daily journey, getting through the day, handling my grief and also figuring the company out."

Hansen-Wolff found herself in difficult conversations with bankers and vendors about the company's financial position. She would hear third-hand that some suppliers publicly expressed doubts about her ability to keep the company going, saying, "she'll never be able to do it." As part of her learning curve, Hansen-Wolff developed a strategy of staying tough.

"I told them, 'either you are working with us or you are working against us,'" she says. After about a year, the company was turning around.

Trying to access online accounts including social media can be a nightmare for someone trying to keep a company going after the owner's death.

David Lyon owned a publishing business that he used to sell his own engineering books. When he suddenly died from a heart attack in December 2017, his daughter Jen took over Raven Publishing Co., based in Pittsfield, Massachusetts. While David Lyon had left a binder with some important information, it didn't include the password to his email. Soon after his death, his social media accounts were hacked and Jen Lyon couldn't respond to requests from readers.

"That's a lot of how he got business — people reached him on LinkedIn," she says.

There were other problems. She had to search through his computer files to understand issues like keeping copyrights going and renewing her father's business licenses. In order to keep marketing the books, she had to learn where he sold them, and what he did to advertise them.

"It's a matter of a lot detective work," she says. "I wish I had an opportunity to have a conversation with him before he passed away."

Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg . Her work can be found here: https://apnews.com .

WASHINGTON (AP) — A soon-to-be-released Biden administration review of Israel's use of U.S.-provided weapons in its war in Gaza does not conclude that Israel has violated the terms for their use, according to three people who have been briefed on the matter.

The report is expected to be sharply critical of Israel, even though it doesn't conclude that Israel violated terms of U.S.-Israel weapons agreements, according to one U.S. official.

The administration's findings on its close ally's conduct of the war, a first-of-its-kind assessment that was compelled by President Joe Biden's fellow Democrats in Congress, comes after seven months of airstrikes, ground fighting and aid restrictions that have claimed the lives of nearly 35,000 Palestinians, mostly women and children.

Biden has tried to walk an ever-finer line in his support of Prime Minister Benjamin Netanyahu’s war against Hamas. He has faced growing rancor at home and abroad over the soaring Palestinian death toll and the onset of famine, caused in large part by Israeli restrictions on the movement of food and aid into Gaza. Tensions have been heightened further in recent weeks by Netanyahu’s pledge to expand the Israeli military’s offensive in the crowded southern city of Rafah, despite Biden's adamant opposition.

Biden is in the closing months of a tough reelection campaign against Donald Trump. He faces demands from many Democrats that he cut the flow of offensive weapons to Israel and denunciation from Republicans who accuse him of wavering on support for Israel at its time of need.

Two U.S. officials and a third person briefed on the findings of the national security memorandum to be submitted by Secretary of State Antony Blinken to Congress discussed the findings before the report's release. They spoke on condition of anonymity because the information was not yet public.

A senior Biden administration official said the memorandum is expected to be released later Friday, but declined to comment on its conclusions.

Axios first reported on the memorandum's findings.

The Democratic administration took one of the first steps toward conditioning military aid to Israel in recent days when it paused a shipment of 3,500 bombs out of concern over Israel’s threatened offensive on Rafah, a southern city crowded with more than a million Palestinians, a senior administration official said.

The presidential directive, agreed to in February, obligated the Defense and State departments to conduct “an assessment of any credible reports or allegations that such defense articles and, as appropriate, defense services, have been used in a manner not consistent with international law, including international humanitarian law.”

The agreement also obligated them to tell Congress whether they deemed that Israel has acted to “arbitrarily to deny, restrict, or otherwise impede, directly or indirectly,” delivery of any U.S.-supported humanitarian aid into Gaza for starving civilians there.

Lawmakers and others who advocated for the review said Biden and previous American leaders have followed a double standard when enforcing U.S. laws governing how foreign militaries use U.S. support, an accusation the Biden administration denies. They had urged the administration to make a straightforward legal determination of whether there was credible evidence that specific Israeli airstrikes on schools, crowded neighborhoods, medical workers, aid convoys and other targets, and restrictions on aid shipments into Gaza, violated the laws of war and human rights.

Their opponents argued that a U.S. finding against Israel would weaken it at a time it is battling Hamas and other Iran-backed groups. Any sharply critical findings on Israel are sure to add to pressure on Biden to curb the flow of weapons and money to Israel’s military and further heighten tensions with Netanyahu’s hard-right government over its conduct of the war against Hamas.

Any finding against Israel also could endanger Biden’s support in this year's presidential elections from some voters who keenly support Israel.

At the time the White House agreed to the review, it was working to head off moves from Democratic lawmakers and independent Sen. Bernie Sanders of Vermont to start restricting shipments of weapons to Israel.

Israel launched its offensive after an Oct. 7 assault into Israel, led by Hamas, killed about 1,200 people. Two-thirds of the Palestinians killed since then have been women and children, according to local health officials. U.S. and U.N. officials say Israeli restrictions on food shipments since Oct. 7 have brought on full-fledged famine in northern Gaza.

Human rights groups long have accused Israeli security forces of committing abuses against Palestinians and have accused Israeli leaders of failing to hold those responsible to account. In January, in a case brought by South Africa, the top U.N. court ordered Israel to do all it could to prevent death, destruction and any acts of genocide in Gaza, but the panel stopped short of ordering an end to the military offensive.

Israel says it is following all U.S. and international law, that it investigates allegations of abuse by its security forces and that its campaign in Gaza is proportional to the existential threat it says is posed by Hamas.

Biden in December said “indiscriminate bombing” was costing Israel international backing. After Israeli forces targeted and killed seven aid workers from the World Central Kitchen in April, the Biden administration for the first time signaled it might cut military aid to Israel if it didn’t change its handling of the war and humanitarian aid.

Presidents Ronald Reagan and George H.W. Bush, in the 1980s and early 1990s, were the last presidents to openly hold back weapons or military financing to try to push Israel to change its actions in the region or toward Palestinians.

A report to the Biden administration by an unofficial, self-formed panel including military experts, academics and former State Department officials detailed Israeli strikes on aid convoys, journalists, hospitals, schools and refugee centers and other sites. They argued that the civilian death toll in those strikes — such as an Oct. 31 strike on an apartment building reported to have killed 106 civilians — was disproportionate to the blow against any military target.

Palestinians mourn their relatives killed in the Israeli bombardment of the Gaza Strip, at a hospital in Rafah, Gaza, Friday, May 10, 2024. (AP Photo/Ismael Abu Dayyah)

U.S. President Joe Biden boards Marine One at Moffett Airfield in Mountain View, Calif., Thursday, May 9, 2024. (Jose Carlos Fajardo/Pool Photo via AP)