Norwood Business Succession Planning Lawyer
Creative Strategies for Passing on Business Ownership to the Next Generation
Whether you worked to build up a business from scratch or have been responsible for maintaining the family business and passing it on to the next generation, business succession planning is something that should be on your mind and that you should take care of sooner rather than later. You may be nearing retirement or years away, but you never know what may happen to you and when. No matter what, you want to know that all the hard work you’ve put into establishing or growing a business won’t go to waste after you are gone.
The Norwood business succession planning lawyers at Fisher Law LLC can help you consider business succession planning as part of your overall estate plan. We can make sure your business is properly dealt with in probate or estate administration by drafting the right will provisions and trusts and advising you on other steps to take for smooth and successful business succession.
Options for Business Succession in Norwood Estate Plans
Like every other aspect of your estate (your home, car, personal belongings, investment property), you need a clear plan for what will happen with the business you own should something happen to you while you are still in control of the company. Simply leaving the business to your family members might not cut it – they could be left arguing over who should run what and how. No one knows your business better than you, and you are in the best position to plan successors for specific roles in your company.
Some of the options for business succession after the death of the owner include:
- Pass the business on to the next generation in the family. The will can name specific individuals and roles for each or leave the business to a class of family members generally (e.g., “my children”).
- Sell the business to an outside entity, with the proceeds going to the estate.
- Have a partner buy out your share according to a buyout agreement. Buyout agreements can restrict who can buy into the business, and they can set a buyout price or establish a method for setting a price. Requiring partners to purchase life insurance naming the business as a beneficiary is one way to buy out a partner’s share in the business. Proceeds of the buyout would go to the estate and be distributed to heirs and beneficiaries accordingly.
- Close the business and liquidate its assets, again with the proceeds going to the estate to be distributed according to the terms of the will or other estate planning documents.
Family Limited Partnerships
When the business is family-owned or closely held, it’s likely vital to the success of the business to keep it in the family. The business might be the most important resource for family financial security as well as provide a strong sense of family identity. Sadly, though, only one out of every three family businesses make a successful transfer to the next generation. Thoughtful planning is key.
One way to pass ownership of a business within the family is through a business structure known as a Family Limited Partnership (FLP). In a typical FLP, senior members of the family serve as general partners and are responsible for the management and control of the business. Younger generations serve as limited partners. They have limited authority over the business operations but control a larger share of the assets or ownership interest. In this way, the business passes from generation to generation without having to go through probate. At the same time, the FLP structure reduces the size of the taxable estate and protects the assets of the general partners. A business estate planning attorney at Fisher Law in Norwood can help you explore FLPs and other means for multi-generational and multifamily transfers of business interests.
Practical, Strategic Advice and Professional Assistance With Business Succession Planning in Norwood
For help with business succession planning and other vital aspects of your estate plan, contact Fisher Law LLC to discuss your needs with a qualified and experienced Norwood estate planning attorney.