Business Succession Planning
What you need to know...
You have made your business your life’s work, yet what happens to your business when life events arise which impact your ability to run your business or retirement is around the corner? Every business is different, as are the circumstances that make up the lives of their creators. Business succession planning requires multiple considerations such as estate and tax planning, obtaining the proper funding to finance a transition, and determining how the standard of living for the individual stepping down may be maintained or altered. While the determination of an appropriate plan may sound complex, planning in advance reduces the complexity of the plan considerably.
The smooth transition of a business after the disability, retirement, or death of its leader or owner is extremely important, and the development of an appropriate plan should be completed in advance. If one or more family members are actively involved in the business under your leadership and are any of them interested in succeeding your leadership? Will family dynamics play a role in whether the transition is successful? Is the management team or other key employees apt to follow another? Are there valuable employees without whom the business would not survive, which need to be involved in the planning process? Are existing relationships with clients or vendors transferable to the individual(s) taking over the business? Do the succeeding family member(s) have the funds to acquire the business or a method for acquiring such funds? These are just some of the questions that will require answers and a successful transition involving these unique family dynamics will depend upon whether everyone involved can work together and plan effectively.
A transition that involves a mandatory buyout upon the disability or death of an owner, for example, will certainly require that planning occur in advance as such events are stressful enough upon family and business associates with whom ownership may be shared. The importance of funding such contingencies with appropriate life insurance, or other mentors cannot be stressed enough.
The attorneys at Legacy Legal Group understand and are experienced in the unique dynamics that must be considered in order to develop a successful business succession plan. Contact us today to ensure that your legacy continues and your future and that of your business are protected.
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