If your family owns a business you have a special need in creating a succession plan.
A good business succession plan may:
- Create employment contracts for the children taking on the day-to-day business responsibilities.
- Create a sales agreement between the children and the parents in control of the company.
- Require purchasing life insurance to buy out the interest of the parents and pay for the price of their stock into their estate.
- Require creating a Family Limited Partnership, with the parents retaining the general partnership position and the children becoming limited partners who increase their equity positions in successive years.
- Require transferring the real property into a trust and allowing the business to rent the property from the parents.
The most important factor is to pass the business with the operating parent maintaining control until such a time that the parent feels that the children are sufficiently prepared to take over. We will also discuss the financial positions of children who may not want to participate in the business.
Connie Reguli has a history of operating a family business and in assisting other family businesses through a successful transition.
Intake form for FAMILY BUSINESS SUCCESSION request