Business Succession Planning

Buy/Sell Agreement Considerations

October is Financial Planning Month, which focuses attention on efforts such as estate planning, long-term care planning, determining familial goals for charitable giving, retirement planning, and our topic for the month, creating a business succession plan.  Financial Planning Month is a good time to take stock of the financial goals you have and work out a road map to achieve them.  We urge you to consider life insurance as a viable vehicle to take you down the path to complete your financial portfolio.

Simplifying the complex is one of our responsibilities when advising our clients on financial matters.  Outlined in the graphic below are guidance questions to ask regarding buy/sell agreements, which we consider as the cornerstone of a successful business succession plan.    

Establishing or updating an agreement can feel cumbersome, but it’s an important exercise, especially in light of the Connelly decision.  Buy/sell agreements can outline a method to determine the value of a business and dictate how each partner’s shares are distributed upon their absence.  As businesses change, the buy/sell agreement should be reviewed to make sure that it accurately reflects current circumstances.  Most importantly, the valuation provision should be audited regularly to reflect the current value of the business. 

Answers to these guidance questions will lead down a path that requires contemplation of more advanced business planning details.  These questions are designed to get the conversation started. 

Since we spend much of our time working with advisors, many of our new client relationships come directly from attorneys, accountants, and wealth managers. We have gained the trust of these advisors, and in turn have earned the privilege to be of service to their clients.  Contact us with any questions or opportunities to help you or your clients achieve identified goals.  This is what we enjoy doing for only a select number of families, businesses, and charitable institutions each year, and we look forward to hearing from you.