Business owners have several unique estate planning needs. Business succession planning addresses both estate planning for business owners and planning for the succession of business interests that involve the sequence of managerial and financial decisions about who will acquire your business. It may entail the transfer of a business during an owner’s life or coordinating the transition of business upon an owner’s incapacity or death.
Writing a Succession Plan
The first step in writing a succession plan is to identify the ideal successor to take over the business. Next is to determine the best selling arrangement, which often involves a buy-sell agreement secured with a life insurance policy or loan.
The Minnesota buy-sell agreement, which is especially useful for businesses incorporated under Minnesota law, provides safeguards against the voluntary or involuntary transfer of ownership rights by imposing certain restrictions. These restrictions ensure that all owners approve of any new shareholder.
Common ways to transfer ownership of your business include:
A plan to transition the business to the next generation or key employees should be developed during the business owner’s life. At Bolt Hoffer Boyd, the goal is to work with your team of advisors, including your financial advisor, business coach, accountant, or insurance agent, to put together a plan that accomplishes your goals.
Some Business Succession Planning Tips
A few points to remember when putting a succession plan together include:
Most business owners know they need to think about succession planning. Few do. As difficult as it can be to consider no longer controlling your business, a proper succession plan can ensure that your business — your legacy — will live on.
If you are thinking about business succession planning or want more information about how succession planning can benefit you and your business, contact the estate planning and elder law attorneys of Bolt Hoffer Boyd Law Firm. We work with business owners to identify and create a clear and simple plan. Contact us today at (763) 406-7000 for a free initial consultation to discuss your options.