Every business (small or large) should have a business succession plan supported by a properly drafted “buy-sell” agreement which acts like a “will” for your business. A good business succession plan will utilize estate planning and business planning strategies such as trusts, business buy-sell agreements and other legal documents to increase the chances for the survival of your business when you retire, become disabled or die unexpectedly.
Some of the important questions that are addressed in a comprehensive business succession plan are:
- Will your family have sufficient liquid resources to hire someone to replace you in the business?
- Will your co-owners pay your family a fair price for your business?
- How do you protect your family if you die unexpectedly?
- Is your buy sell agreement adequately funded?
- How is the price of the departing owner’s interest determined?
Business owners should have an overall estate plan in place with carefully designed estate planning documents that work together to create a business succession plan that works.
To learn more, contact the author: John S. Polgrean, Esq.