Business Succession Planning
Why You Need a Torrance Estate Planning Attorney's Help
Owners and operators of closely held or family businesses dedicate their
lives to making sure their businesses are successful and profitable. Families
count on these businesses for their support and livelihood. It is essential
to have a business succession plan in the event of the owner's death
Torrance estate planning attorneys at the Law Offices of James C. Shields have the requisite knowledge and
professional experience to ensure your business continues to thrive no
matter what the future may hold. The main reason a family-owned businesses
does not survive to the next generation is due to a lack of planning.
Failure to implement a business succession plan along with estate planning
will almost certainly result in disruption of the business, and it could
result in a forced liquidation in order to pay estate taxes. Our South
Bay estate planning firm can help you avoid these difficulties and protect
your family's future.
A buy-sell agreement, or BSA, is essential for any good business model
and guarantees a set price and a willing buyer in the event of a death
or retirement. A buy-sell agreement will lock-in the value of the business
at a conservative price, which is essential for good
estate tax planning. It will name the future buyers and ensure that there is funding available
to immediately purchase the business interest and ensure continuity of
production. It is necessary to plan to fund the buy-sell agreement so
that there are liquid assets available; purchasing life insurance is the
most common way to accomplish this goal.
Revocable Living Trust
Another key element to good business planning is to execute a revocable living
trust. This will keep the business completely free from the
probate estate, avoiding administrative fees and keeping your business interests
free from public scrutiny. Revocable living trusts allow business owners
to name a successor trustee, ensuring the assets and control of the business
are passed along smoothly, quickly, and privately.
Plan Ahead for a Smooth Succession and Minimal Disruption
If you own a closely held business, there is no time like the present to
implement a good business succession plan. Doing so will free a business
owner from worry about what is going to happen to the business and their
family after he or she retires or passes away.