Owning a family business gives an excellent opportunity to pass on wealth to future generations, but this is only possible when you have a clear business succession plan created and implemented in advance.

Many business owners rethought their decisions about their succession plan and retirement in the light of covid. Many of them were confronting these issues for the very first time. Research from PWC’s US Family Business Survey shows that only 1/3rd of business owners with a family company in the United States have a documented, comprehensive and clearly communicated succession plan in place.

There are dangerous consequences for failing to have this plan in place, such as limited tax planning opportunities or not having the right people in place to run the company. Most people do not anticipate leaving their family business any time soon but an exit that occurs too quickly or without proper training opportunities for the next round of leaders could have unfortunate consequences with your existing customers and clients.

This makes it all the more important to retain the services of an experienced and dedicated lawyer to create a business succession plan that works for you and your company.

A business succession plan is a living document that will have action steps and task items that will need to be addressed while you’re still in place in the company. This gives you the best possible opportunity to influence the future generations and to make sure that everyone who is stepping into the leadership roles will have the appropriate support and training to do them in the future.

There are several different areas of transition including the family, the business, the founder, management and ownership. Make sure that you’ve also considered the estate tax consequences before working with a knowledgeable lawyer.

Many sad stories about celebrities highlight the importance of estate planning. Many of them leave behind complex assets and high value items. Without estate planning, this leaves their loved ones coping with probate problems for months or even years.

A similar situation applies to those entrepreneurs who don’t look at their personal and professional estate planning as worthy of effort. Consider the estate of Tony Hsieh, Zappos CEO, who passed away suddenly in a fire at age 46. With an expected net worth in the hundreds of millions of dollars, his family was shocked to learn that he passed away without a personal estate plan.

It’s believed that over 60% of Americans don’t have an estate plan at all. Without a personal estate plan, your loved ones might struggle to receive the assets that you intended them to have. As a company owner, however, you can’t ignore the related challenges with your business.

Your business requires considerations and questions like:

• What happens if I become disabled or unable to make decisions within the business for a period of time?
• Are there any other owners or key employees who need to be included in the planning process?
• What existing documents do we already have in place with a succession plan?
• Do we have insurance policies in place on key employees to allow us to hire new help and weather the storm if they were to suddenly exit?
• What does the future of my business look like?

Most business owners want to know how their company will expand and grow in the coming years. It’s equally as important to have the support of an experienced business succession lawyer to guide you through the process and help you figure out answers to the questions above.

If you need help defining what your succession plan is and the key people involved in that process, now is the right time to document and implement that plan.

Reach out to our office today to learn more about estate planning, business planning, and how to make sure these work together.

There’s a lot that goes into deciding it’s time for your next chapter when you own a business. You want to know what’s going to happen to it and the key people involved in that transition. This is documented in a business succession plan.

Selling your business requires a comprehensive business succession plan ideally created by an experienced business succession planning lawyer. After an extremely challenging 2020, many business owners might be thinking about making an exit because of the surge of buyers in the market and the possibility of increasing taxes. This has, for some, created the perfect storm for creating your business succession plan and executing it sooner rather than later.

One recent industry report shows that the pace of recovery has varied among sectors and companies but US business deal value and volume overall are up from 2020. Demand among buyers continue throughout the pandemic but there were very few businesses for sale on the market.

Many of those that were negatively impacted by the pandemic were waiting for opportunities to recover before selling. However, pent up consumer demand has meant that many of them have been able to bounce back faster than expected. This can create the perfect opportunity for you to determine what’s next in your business succession plan.

Even if you determine that now is not the right time to execute on a business succession plan, creating this document and the strategies to support a full transition to other company owners can benefit you by making it that much easier if and when a faster transition is required.

Small business owners have plenty of things to think about in the wake of a worldwide pandemic that has shaken many things up. But that doesn’t mean you can afford to neglect the importance of proper estate planning or business planning options. Using this time to take a step back and reorient where you want the company to go in the near future is a good way to keep on top of these important tasks and ensure that if something happens to you, there’s a plan in place.

Every business owner has the long term vision and goal that their company is a big success, but it can take a lot of work to get there and even more work to sustain it after the fact. When you need to make a departure from the company, you need to know that you have a succession plan that will serve your needs and give your business the sustainability it needs.

That comes down to systems, a succession plan, and the right people. All of these elements should be in place well before anything happens involving you or another company owner needing to make an exit. One primary reason to engage in business succession planning beyond these basics is that if you’re in a partnership, you can ensure maximum options for the remaining partner should something happen to the other one.

Buy-sell agreements can help to accomplish this task because it ensures that unless intended, the family members of the deceased party are not the ones who get access to the company value. If there’s no buy-sell agreement in place, the business could be tied up in the estate administration if one of the partners of the company passes away. Most buy-sell arrangements for small businesses will automatically allow other owners to purchase the owner’s share in the company, allowing for a smooth transition to what the business looks like in this new iteration.

Are you stuck on how to make the most out of small business estate planning? Now is a good time to discuss all your options with a dedicated business succession planning attorney in NJ. Set up your meeting today.

A person running a business cannot have an estate plan without a business succession plan and vice versa. These items must work together to protect your individual interests, your future beneficiaries and the future of the company. All too often, however, critical details are overlooked in your individual or your business succession plan. 

A rock-solid plan for the future can give you greater peace of mind and help to protect your beneficiaries if and when you become incapacitated. The first of these issues has to do with incapacity.

Far too many people approaching estate planning look at it just for handling what happens when you pass away. However, it is becoming more likely that the average person entering retirement will at least one or more periods of incapacity during their lifetime in which they are unable to make decisions for themselves. Make sure that you appoint someone else for seamless asset management during these periods of incapacity.

Continued management of your assets and the business should also be included after you pass away. Place these assets inside a trust if necessary because the beneficiaries are not of sufficient maturity or age. Another thing to consider on behalf of your beneficiaries is divorce protection. Although your loved ones might appear to be married happily right now, nearly half of marriages end in divorce. Divorce protection can be one way to give you peace of mind about your loved one’s future. Finally, also consider whether or not beneficiaries could have creditor issues. Asset protection involves developing trust and other strategies that can help to shield these assets from being attacked by creditors. One of the easiest tools to do this, with the help of an experienced estate planning attorney, is to put the assets inside a fully discretionary trust managed by a third-party trustee. If you have questions about approaching the estate planning and business succession planning process, the support of a lawyer is instrumental in helping you to accomplish your goals. Schedule a consultation with an attorney today.