A significant percentage of this country’s wealth centers is held by small and family-owned businesses and partnerships. Protecting that wealth requires forethought about what to do when the primary or founding business owner retires. It also means preparing for the possibility of an unexpected disability or death of the primary owner.
Succession planning is estate planning for businesses. A workable succession plan requires the assistance of an attorney with business, tax, and estate planning expertise. A Virginia Beach business succession planning lawyer at Parks Zeigler has the knowledge and skills to advise you on establishing a prudent and practicable business succession plan.
What Does a Business Succession Plan Do?
A business succession plan provides for the orderly transfer of an ownership interest when an owner steps away due to retirement, disability, or death. The specifics of the succession plan vary depending on the type of business and the owners’ goals. A succession plan for three doctors practicing in a partnership looks different than the succession plan for a family-owned sporting goods store.
Although every succession plan is different, most have similar goals. One is to keep the business operating smoothly and profitably, if possible. Minimizing taxes is another goal. Because a business is often a family’s most valuable asset, a third goal is often to ensure the owner’s heirs receive some funds from the company.
A Parks Zeigler lawyer in Virginia Beach can listen to an owner’s intentions and devise a business succession plan to meet their goals. We can explain the various legal options to co-owners, key employees, and family members to create a succession plan that works for your business.
Strategies for Transferring Ownership
The succession plan should address who gets the ownership interest when the owner must step away and whether that ownership interest also conveys participation in running the business.
In some cases, the ownership transfers to a spouse, child, or children, and they have the power to run the business. In other cases, family members, partners, or third parties might buy out the owner’s share and take over their management responsibilities. Sometimes, the business buys out the owner’s share.
Many strategies are available depending on the specific needs of the owner, their family, and the business. A business succession plan might require the strategic gift of assets, use of life insurance to fund the purchase of a business interest, buy-sell agreements, trusts, Power of Attorney, and other elements. A Virginia Beach attorney could work with the business owner to determine how best to accomplish their goals, using these tools and others to plan a succession strategy.
Coordinating a Succession Plan With an Estate Plan
An estate plan ensures your assets are available to the people you name as heirs. A comprehensive estate plan minimizes tax liability and keeps as much property as possible out of probate. It also could protect the property you pass down from dilution by a subsequent spouse or your children’s spouses.
A business succession plan attempts to achieve many of the same ends, with the additional consideration of maintaining the business as a profitable enterprise. The estate and business succession plans should work together to further the owner’s goals for the business and their personal property.
A Virginia Beach lawyer can provide comprehensive services to create estate and business succession plans that work together to meet an owner’s goals. When an owner already has an estate plan, our legal professionals can review it and tailor a business succession strategy that works with the plan in place or suggest amendments to achieve the results the owner wants.
Work With a Virginia Beach Business Succession Planning Attorney to Protect the Future of a Company
Your business might represent your life’s work. When you want it to thrive after you step away from active management, succession planning is a must.
A Virginia Beach business succession planning lawyer has the business acumen and legal expertise to craft a plan tailored to your goals and your family’s needs. It is never too early to get started. Schedule a consultation at Parks Zeigler, PLLC, today.
