Business Succession Transition Planning

By: Hammond Iles on December 11th, 2015

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Business Succession Transition Planning

business succession planning  |  legacy planning  |  Retirement Planning  |  business transition planning  |  Estate Planning  |  estate plannning  |  Legacy Planning  |  Wealth Management

All closely held businesses face the possibility of an owner dying, retirement or becoming disabled. A business owner’s death or disability can create major problems. A lifetime of hard work and investment can be jeopardized, leaving the other owners and the deceased’s family in the difficult position of sorting things out. A properly structured and funded buy sell agreement permits an orderly transfer of the business.

There are several occurrences that can cause disruption of a business:

  • Death of an Owner
  • Disability of an Owner
  • Bankruptcy or Divorce of an Owner
  • Retirement of an Owner
  • Withdrawal of an Owner prior to retirement
  • A key non-owner whose death or resignation would greatly impact the success of the business

For Family Owned Businesses, there are additional considerations:

  • Failure or liquidation of the business in event of sudden incapacity of the business owner, partner or key employee
  • Unqualified and/or inexperienced heirs running the business
  • Loss of income stream to remaining family members who are not active in the business
  • The potential for unwanted litigation expense due to disagreements between active and inactive family members

A buy-sell agreement usually lists a variety of events which trigger the obligations to buy and sell the interest of a departing owner. Effective buy-sell agreements establish the price, payment, terms and the procedures for transferring a departing owner’s interest. Once an agreement has been signed, it needs to be kept up to date. Both the agreement and the assets set aside to fund it need to be regularly monitored.

Hammond Iles Business Succession Transition Special ReportDownload the Business Succession-Transition Planning Report
Learn more about:
If There Is Not a Formal Buy Sell Agreement
If There Is A Formal Buy-Sell Agreement
How Will The Agreement Be Funded?
Types of Buy Sell Agreement
Plan Comparisons
Using a General Partnership for Buy Sell Purposes

Download the Report

At Hammond Iles Wealth Advisors, we believe that wealth management is personal and unique to every individual. Working with you and your advisors, we can help you determine the best way to work toward your objectives and implement your business planning strategy. Begin with a Wealth Impact Assessment, call (800) 416-1655 or email clientcare@hammondiles.com to schedule yours today.

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