Checklist of Issues to Address When Making a Business Succession Plan
1. What is the strategic vision for the business?
2. Does the owner or the owner’s spouse need to: a. sell the business at the time of departure; or b. continue to draw income from the business after departure?
3. How will the business continue without the daily involvement or participation of the owner?
4. Will shares of the company or its business assets need to be sold to leave an inheritance to the owner’s heirs or beneficiaries, or to pay creditors claims against the owner's estate?
5. Whom does the owner want to operate the business after the owner’s departure?
6. Whom does the owner want to own the business as part of the succession plan?
7. Does the organizational structure or type of business entity need to be changed as part of the business succession plan?
8. Does the owner wish to gift all or part of the company to the owner’s children, other heirs or charity?
9. If the owner desires to sell the business, is there a prospective buyer?
10. How do key employees, co-owners or shareholders of the business factor into the business succession plan?
11. Do you have a strategy to retain clients or customers after the owner’s departure?
12. Does the business have adequate liquidity or insurance, such as life insurance, to manage the transition to a new owner or leader and any decline in revenue or income that may occur after the owner’s departure?
13. If the interest of a co-owner, partner or shareholder will be bought as part of the business succession plan, how will the buy-out be funded and are the necessary contracts in place, such as a buy-sell agreement or partnership agreement?
14. Do you have a plan to deal with estate taxes on the owner’s estate and the impact of such taxes on the business?
15. Are professional advisors, such as an estate planning lawyer and a tax accountant, needed to help develop the business succession plan?
16. What estate planning forms, contracts or other documents will the owner and the owner's spouse or partner need to execute to carry out the business succession plan?
Business Succession Plan Documents
The following types of documents are often used as part of a business succession plan:
Life Insurance Trust
A business owner should also consider using the following types of documents in his or her estate plan to ensure the business succession plan can be implemented after the owner's death:
Durable Power of Attorney for FinancesGuide to Business Succession Planning, Insurance, and Your Estate
Written for business owners, advisors, financial planners, and attorneys, Business Insurance, Estate Planning & Business Succession Planning is an easy to read guide to estate planning for business owners. It explains how to create a successful business succession plan and the role of buy sell agreements, cross purchase agreements, life insurance, and business insurance in such a plan. This guide also provides an overview of different types of structures used in business planning, such as sole proprietorships, partnerships, corporations, and trusts.
Business Insurance, Estate Planning & Business Succession Planning covers key elements in estate planning, such as making a will and power of attorney. It includes relevant estate planning forms business owners may need, such as a cross purchase option deed form and a buy sell agreement. Wealth transfer options and trust administration are also addressed.
If you want an organized guide to business succession planning written by an author with practical knowledge of business and markets, Business Insurance, Estate Planning & Business Succession Planning is highly recommended.
is an easy to read guide to estate planning for business owners. It explains how to create a successful business succession plan and the role of buy sell agreements, cross purchase agreements, life insurance, and business insurance in such a plan. This guide also provides an overview of different types of structures used in business planning, such as sole proprietorships, partnerships, corporations, and trusts.