Business Succession Planning
Business Succession Planning
When a business partner or major shareowner dies, the business loses a valuable asset and could suffer in the short term. However, the long-term issue for the surviving business owners is whether the business can survive when the deceased partner/shareholders' family members show up for their interest in the business.
Business Succession Planning begins with the owners or shareholders deciding which method is best to transfer or buy-out the decedents business interest from the surviving partners or shareholders. As discussed in the Buy-Sell section of this website, the buy- sell agreement should also be coupled with a business valuation appraisal done by a qualified firm rather than waiting for the IRS after the death of a partner or shareholder owner. Using life and disability insurance coverage is the most cost efficient way to fund the amount needed to transfer the businesses interest to the surviving partners or shareholders.
Key Person Life Insurance
As a successful businessowner, you know your employees help to make your business a successful, thriving enterprise. In fact, you can identify some employees as “key” to the organization's ongoing success. These individuals possess unique skills, expertise, decision-making power and vision. Their unplanned absence can disrupt the company's earnings, productivity and morale. Key person coverage helps you manage this risk.
