What is the Purpose of a Business Succession Plan
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Transcript of What is the Purpose of a Business Succession Plan
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
WHAT IS THE PURPOSE OF A BUSINESS SUCCESSION PLAN?
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
THE PURPOSE OF A BUSINESS SUCCESSION PLAN?
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
While an estate plan helps to protect your assets from taxes and creditors and allows you to
control how your property will be distributed,
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
a BUSINESS SUCCESSION PLAN can help you make sure that your
business will be protected and management will be transferred to
the individuals you choose after you retire, or upon your death.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
PROTECTING YOUR LEGACY
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
If you want to ensure that your family-owned business, and the legacy it will provide, will be
passed down from one generation to the next, it is vital that you not only consider, but plan for the
succession of your business.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
In order to accomplish this, you must create a proper business
succession plan and put that plan in place as soon as you can.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
THE INDISPUTABLE BENEFITS OF A BUSINESS SUCCESSION PLAN
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Eventually, you will start contemplating your retirement from managing your
family-owned business
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
You must realize, though, that retiring from your own business is
not as simple as turning in your letter of resignation.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Indeed, you cannot feel comfortable retiring until you know you have left
your business, and your legacy, in capable hands.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
The reality is that most business owners do not have a succession
plan in place. While most expect to pass their business on to their
children or grandchildren, statistics indicate that less than 30% of small
business owners actually have a workable succession plan in place.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
WHY YOU MUST HAVE A SUCCESSION PLAN
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
The ultimate objective of your succession plan should be the smooth transition of ownership of
the business to the next generation.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Without a smooth transfer of management, your business could be in jeopardy and may not survive
your retirement in one piece. A well-thought out succession plan is
the answer.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
The two most common issues that prevent family-owned businesses from surviving are inadequate tax
planning and family disagreements. Fortunately, both of these issues
can be handled with comprehensive BUSINESS SUCCESSION
PLANNING.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
WHAT YOU SHOULD INCLUDE IN YOUR SUCCESSION PLAN
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Every business succession plan should address the following issues: ownership,
management and taxes.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
A common misconception is that management and ownership of a
business are the same thing, when in fact, they are very distinct
concepts.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
While you can certainly transfer ownership of your business to all of your children, you may only want to
name one of your children to take over management of the company.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
In reality, not all of your children will be interested in managing the business or even being active in its
operation.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
PLANNING FOR BUSINESS TAXES IS CRITICAL
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
When you start planning the succession of your business, addressing tax liability should be a very
important element of your plan.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
The objective is to reduce the amount of taxes your estate will
incur as a result of your interest in the business.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
If planned properly, there are several business planning strategies
that can be used to minimize tax consequences. For instance, many
small businesses qualify for tax credits.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
WAYS TO MINIMIZE TAXES DURING THE TRANSFER OF YOUR BUSINESS
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
There are different ways to accomplish the transfer of a business, including outright sale,
installment sale, buy-sell agreements, and outright gifts.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Each of these planning techniques has its own tax consequences which must be considered carefully when
you establish your business succession plan.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Some of the most common strategies that business owners can utilize to reduce transfer taxes are
valuation discounts, irrevocable life insurance trusts and the election to defer payment of estate taxes with respect to closely-held businesses.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
START YOUR BUSINESS SUCCESSION PLANNING NOW
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
In order for your business succession plan to be successful, it should be put in place as soon as
possible.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
That way you can better ensure that your family-owned business will
continue to grow from one generation to the next.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Early planning is also necessary if you want to have a comfortable
retirement, while still protecting your family’s future and the future
of your business.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
DON'T FORGET LIABILITY INSURANCE FOR YOUR BUSINESS
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Business and asset protection planning is not a substitute for liability insurance.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
Instead, it should only supplement insurance. Asset protection are not
meant to deter lawsuits, nor do cover the legal fees required to
defend against a lawsuit.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
If you are sued, it is your insurance company that will be responsible for
defending you or paying to settle the claim.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
CONTACT US!
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
If you have questions regarding business succession planning, or any other estate planning needs,
please contact The Vermillion Law Firm, LLC for a consultation either online or by calling us toll free at
(888) 567-5745.
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
LEARN MORE ABOUT BUSINESS SUCCESSION PLAN IN TEXAS
7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560
(972)386-4560www.VermillionLawFirm.com
The Vermillion Law Firm, LLC