The owners of small businesses and family owned businesses face unique complexities related to estate planning, asset protection, and wealth transfer. Our attorneys structure comprehensive business succession plans to address client’s combined estate planning and business ownership issues. Succession plans include a series of documents to meet the client’s goals and to provide for the transition of ownership, management, and leadership of the company. To generate a unique succession plan, the following factors are considered:
A) YOUR GOALS AND CURRENT STATUS:
What is the present value of the business?
Is there a financial plan for retirement?
Will funds from the business be required to afford retirement?
Will there be enough business income to retire comfortably?
Is there a plan for the business in the case of disability or death?
How will your spouse be provided for upon your death or disability?
Is there a plan regarding when to transfer or sell the business?
Do you intend to gift the business to family rather than selling it?
B) YOUR MANAGEMENT PLAN FOR THE BUSINESS:
Who will manage the business upon your death, disability, or retirement?
Can your children or employees manage the business after your death, disability, or retirement?
Do you have well trained management if there is no other employee or family member to manage?
Would gradual transfer of management responsibilities be beneficial?
Are you able to retain talented and key employees during the life of the company?
Do you have “key man” life insurance and/or disability insurance policies in place?
C) YOUR DOCUMENTS TO TRANSFER OWNERSHIP:
Your business succession documents may include a Members’ Agreement (also known as a Buy-Sell Agreement) or a Shareholder Agreement with the other owners to handle the distribution of ownership of the business should a trigger event occur. Triggering events are an owner’s death, disability, divorce, retirement, legal proceeding, or termination of employment. Replacement charts for key positions, position profiles, performance and potential grids, development plans, executive profiles, competency models, company and talent management strategy are also beneficial.
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