Creating Viable Business Succession Plans in Omaha
For many small business owners, maintaining a stable balance sheet and positive cash flow consumes most of their time. Retiring can seem like a small blip on the radar, and planning to hand over your business maybe hasn’t even crossed your mind. Creating a solid succession plan, while seemingly overwhelming, is beneficial to most business owners and an absolutely crucial step for some.
Professional Help from Business Attorneys
Our team of estate planning and business attorneys is here to help make the succession planning process as stress-free as possible. Planning is especially important for owners who are nearing retirement age, as many owners want to see their businesses continue to thrive long after they’re gone.
Selecting a successor can be as easy as appointing a family member to replace the owner, but sometimes businesses have several partners or family members from which the owner has to choose. One of the team members at Dvorak Law Group will take you through the steps of naming a successor and help you make the best decisions for your company and your legacy.
Business Transferring Methods
Business are transferred through two basic methods:
- Cross-Purchase Agreements – Agreements structured so each partner buys and owns an insurance policy on each of the other business partners.
- Entity-Purchase Agreements – The business itself purchases a single insurance policy on each partner and becomes both the beneficiary and policy owner.
Putting Business Succession Plan in Place
Developing and implementing a sound succession plan provides several benefits to owners and partners:
- The plan ensures an agreeable price for a partner’s share of the business and eliminates any need for valuation upon death because the insured agreed to the price beforehand.
- A succession plan helps to ensure the process of settling the deceased party’s estate goes smoothly and quickly.
- The insurance policy benefits will be available to pay for the deceased’s share of the business immediately with no time constraints. This prevents external takeover due to cash flow problems.