If you are starting to think about retirement, then it is also time to think about business succession.
You can try to tackle this on your own, but your best bet is enlisting the assistance of an experienced business succession attorney, like those at Legacy Law Group, PLLC. We will have the background and skills to help you plan for the future, putting you and your business in the best position for a profitable and smooth transition when that time comes.
Exit strategy. Determining what will happen if and when you are no longer able to run your business is critical. The attorneys at Legacy Law Group, PLLC will discuss various scenarios with you. This process can help both us and you evaluate all of the “if this, then that” scenarios.
These scenarios may include how you will leave the business at retirement, including whether you will wind up the business, sell to an interested party, or pass it down to a member of your family. Also, remember to consider the consequences if you were to be unexpectedly struck with a serious illness or injury. Your attorney can help you set up short-term protocols if your unexpected exit is of a shorter duration and other protocols should your absence be long-term or permanent.
Disability insurance. Disability insurance is an essential funding consideration to help keep the business and your family afloat should unexpected or unforeseen events alter your succession plans. In such instances, make sure you have the right kind and amount of disability income insurance to support you and your family. Also, key man disability insurance can help keep the business running without you.
Retirement and estate planning. If you have not done so, then now is the time to start a retirement plan. A comprehensive retirement plan typically includes tax-deferred investments (e.g., think 401K, SIMPLE Plans, etc.), after-tax savings vehicles, trusts, and all manner of assets designed to provide the greatest return on your hard work for a future retirement. Your estate planning attorney will have ideas uniquely tailored to your specific situation and will work in close coordination with your financial advisor. This teamwork is essential given the tax planning and beneficiary designations involved.
Are you mentoring your successor? Think about what makes a good “you” in your business. What does it take to run your business efficiently and effectively? Once you have identified those personal qualities and traits, then it is time to select a successor — the person you want to take over. Choose wisely.
Timeline. You and your attorney should develop a flexible, written timeline. While it need not be set in stone, you should know generally when you would like to retire and sell, close, or transition your company to a new owner.
Pick up the phone and call us today, or contact us online. Provide a copy of this article to start the process on solid footing.