Succession Planning

Business succession planning is a series of financial and logistical preparatory decisions regarding the allocation of a business owners business assets following their retirement, death or disability. Succession planning typically includes writing a succession plan (which helps identify the ideal successor to take over the business, and to determine the price of the owner’s share), as well as creating a life insurance policy (to help protect the business from buy-outs from relevant third-parties). In this way, succession planning can help protect businesses, co-owners, and other employees, from an external takeover following an owner’s departure, and help minimize future headaches and monetary losses caused by the transition.

A succession plan provides owners and partners with several benefits. For one, it determines an agreeable price for the owners’ share of the business, effectively eliminating the need for valuation upon their departure. Moreover, it makes it clear who will take over the business, reducing any potential disputes between parties. If a purchase is involved, the sale price and purchase terms are also clearly outlined in a buy-sell agreement. Once a set dollar value has been determined, life insurance will be purchased for the business heir(s), so that when the business owner passes, the proceeds from the policy will be used to buy out the deceased partner’s share of the business. This prevents the threat of an external buy-out or third-party takeover following their succession, as well as the possibility of cash flow problems, or the need to sell the business to cover the cost of the deceased’s interest.

Business Benefits Group provides comprehensive succession planning advisory services to help business owners prepare for a smooth transition following their succession. We advise and consult on a variety of succession planning matters to help owners determine the best insurance programs and other arrangements they should put in place to both fund and streamline this complex process. At the same time, we also provide extensive guidance in documenting buy-sell agreements and buy-out plans to ensure that the owner’s interest is thoroughly paid for and promptly distributed to the rightful partners or heirs. Our team of experienced succession consultants will work with you to help ensure a productive and equitable transition, that allows for minimal disruption of your organization’s day-to-day operations, and that is conducted in accordance with your expectations.