Your Business Needs A Succession Plan Most people think to create a plan for their personal assets in the event of their death; however, if you are an owner, or part owner, in a business, you need to include your business assets in your estate planning. Succession planning, as it is often called, creates a comprehensive plan that will dictate what happens to your business upon your death. How complicated your succession plan needs to be will depend largely on the structure and size of your business. For a relatively small sole proprietorship, for example, succession planning need not be as complex as that for a multi-million dollar partnership or corporation. Before you can develop a succession plan, you need to know what your business is worth, or what your share of a partnership or corporation is worth. In addition to determining the value of your business interests, you must decide what you intend to happen with those interest upon your death. Are you planning to pass down your business to a family member, sell the business outright or sell your interest to an existing partner, for example? Once you have completed these important first steps, you can begin to work on the more complex aspects of a succession plan. Various tools can be used when creating your succession plan such as a will, trusts, life insurance, joint accounts and buy-sell agreements, among others. Each tool has a specific purpose and solves a particular problem. A life insurance agreement, for example, can be used to provide the cash to buy out your share in a partnership. A buy-sell agreement can be executed prior to your death as a way to ensure the sale of your business upon your death. Specific trusts can also be used to transfer assets while you are still alive that will then be passed on to your beneficiaries upon your death. Just as each individual has a unique personal estate, each business has a unique make-up and a unique set of assets and debts. As a result, your particular succession plan may use all of the tools mentioned or only some. It may also employ other tools available. In order to best determine how to create a comprehensive succession plan for your business, consult with your estate planning attorney early on in the life of your business as well as later on as your business grows and becomes more successful. You may have noticed that the law firm of Purcell and Amen is a small business, perhaps in many respects much like your own. We face the same challenges: finding training and mentoring reliable key personnel who can continue to serve our clients long into the future, working out financial arrangements, planning insurance and retirement needs, creating an effective legal and business model, putting appropriate agreements and instructions in place. Call us when you are ready to update your own plan. Experienced estate planning attorneys St. Louis MO of the Purcell & Amen LLC offers estate planning and business planning resources to residents of St. Louis MO. To learn more about these free resources, please visit http://www.yourestatematters.com today.
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