PRINCIPLES
The following inheritance guidelines explain how inheritance works and what you need to do to ensure your business continues after you are no longer here to operate it. Inheritance is governed by Melaleuca’s
Statement of Policies, which is a part of your Independent Marketing Executive Agreement (IMEA) with Melaleuca. However, before delving into the details, it’s important to understand the principles behind the rules: Melaleuca’s approval is necessary for the transfer of any business, including from an inheritance. The intent of the Inheritance of Business Policy is to allow for the transfer of a Melaleuca business from one generation to another. Therefore, transfers to nonfamily members are discouraged and will not normally be allowed. Exceptions must receive special written approval from Melaleuca. Melaleuca does not permit the transfer or sale of a business for money or other consideration, and the guidelines of inheritance are no exception. Melaleuca has long endeavored to establish measurements and qualifications to compensate those who play an ongoing role in the sale of products by Melaleuca to customers. To qualify for any compensation, Marketing Executives (including those who inherit a business) must fulfill a bona fide leadership role and fulfill the ongoing responsibility to consistently service, supervise, motivate, train, and assist Marketing Executives in building their marketing organizations in order to promote Melaleuca’s products and the Melaleuca income opportunity. While the right to receive compensation can be inherited, the right to recognition cannot be inherited. Recognition will be based on a Marketing Executive’s own accomplishments, not the accomplishments of the person from whom the business was inherited. In other words, an inherited Executive Director business will be compensated as an Executive Director but will not be recognized onstage at Melaleuca events or be celebrated as an Executive Director until that status has been personally earned by the recipient. Melaleuca reserves the right to disallow any inheritance that is not clearly consistent with applicable law. In addition, Melaleuca will not permit any inheritance that is inconsistent with these principles or that otherwise attempts to manipulate or get around the requirements of the Statement of Policies or the Compensation Plan.
SUMMARY In most cases, these are the key steps to set up a successful succession plan. List who will inherit your business in your will or trust document (generally your spouse or one of your children or grandchildren). If multiple children will share the business, indicate who will manage the business (Designated Manager) and work with your attorney to establish a legal entity in which the children will have ownership. Keep in mind that there can only be one Designated Manager, and that person must be willing to do all the work a Melaleuca business requires. Review with your attorney to make sure your will complies with your state and local laws. Make sure the individual you designate understands how to run a Melaleuca business well ahead of inheritance. In most cases, it would make sense to have the heir enroll today and begin learning Melaleuca’s policies and principles and how to fulfill Melaleuca’s leadership responsibilities. It is not advisable to gift the business to someone who has not previously shown interest in operating and benefiting from a Melaleuca business.
Call Melaleuca with questions.
LEAVING A LEGACY 3
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