Planning for Business Owners

Business owners face unique challenges—and opportunities—in terms of financial planning. You’ve worked hard to develop your ideas into a successful business, or perhaps you’re considering a move into self-employment. Whether your business is large or small, you can still benefit from a plan that ensures a smooth transition for successive owners.

If you want to become self-employed, we will discuss revising your financial plan to accommodate benefits which were previously provided by your employer such as health, disability, and life insurance along with your pension or employer sponsored retirement plan. 

Regardless of the size or stage of your business, let us work with you design a tax-efficient business planning strategy.

Business Retirement Planning

You worked hard to develop a business, and now is time to enjoy the results. Whether you plan to utilize life insurance policies, continue to receive a stipend as the business founder, or arrange for the new owner to methodically buy up your share of the business, there are many factors to consider before a business owner can retire. Our wealth management advisors will partner with your tax and legal advisors to structure a plan that best meets your needs.

Business Succession Planning

Many entrepreneurs spend years of focused effort building up a business, but then fail to consider how to make the transition to retirement or upon the untimely death of an owner or partner. Our wealth management advisors can offer advice on how to develop an effective business exit strategy.
Smaller businesses may not need to pay estate taxes but can still benefit from a plan that ensures an equal legacy for their successors. Let one of our wealth management advisors help you start developing a plan today.

The Need for a Written Agreement

The death of a partner or major stockholder in a business can have devastating effects on both the business and the deceased partner’s surviving family.  The business must focus on continuing operations without interference from the surviving family members.  The family members should be fairly compensated for their interest in the business and for capital that may be needed for estate settlement purposes.

Absent a written agreement, the competing interests of the business and the family members could lead to major conflicts, litigation and possibly the forced liquidation of the business.  A buy-sell agreement can ensure that the business interest of the deceased partner will transfer in an orderly manner to the benefit and satisfaction of all parties. With a buy-sell agreement in place, the stability of the business for clients, employees and investors (or creditors) is more assured.

Key Elements of a Buy-Sell Agreement

Key elements of a buy-sell agreement include a mutually agreeable sales price and terms of the sale.  The agreement needs to be funded in order to ensure that the capital is available at the time of the death of a partner.  Life insurance provides a cost-effective means of creating the capital necessary to buy out the interests of the family and establish a reserve for the business to continue its operations. Because buy-sell arrangements vary in type and complexity, it is important to work with a team of advisors who can design the plan that best suits the needs of your business. 

Business succession planning involves legal, tax and personal financial issues. Guidance from a qualified attorney or tax professional, partnered with your wealth management advisor is strongly recommended.

Let us help you protect your business interests.