Estate Planning for Business Owners in Jacksonville, Florida
With family-owned businesses constituting over half of the U.S. GDP, your family-owned business is an important asset, both to you and to the United States. Unfortunately, an estimated 2/3 of family businesses fail the first time a transition to new ownership is attempted. Whether you are intending to purchase or sell an established business (or related commercial property) or attempting a more gradual transition to new owners or family members, our Jacksonville business lawyers can walk you through the process to help prepare your most valuable asset for a major transition in the life-cycle of a business.
Business Succession Plan through Buy/Sell Agreements
A business succession plan determines what will happen to your business in the event of your death, incapacity or retirement. Just as an individual would not want to pass away without a will, successful business owners should have a well-thought out business succession plan to determine what will happen in the event of they are no longer available due to death, retirement or incapacity.
Choose the Right Buyer
Choosing the proper person to manage or purchase a business is one of the key choices that will be made in planning out this step in your business’ life. Business owners should examine who would be available to run their business in the long-term, but also keep in sight who would manage their business in the event that they are suddenly unavailable.
An experienced business succession lawyer will help business owners examine their business in the context of their estate plan. One of the critical components of these plans will deal with the liquidity available both to your business and to your family in the event of either a planned or an unplanned absence from your business. A buy/sell agreement can establish a basis for this liquidity upon an owner’s death, incapacity or retirement.
Execute and Fund a Buy/Sell Agreement
A buy/sell agreement is a contract made while you are alive that will trigger the sale of your business interest upon certain events, which may include your death, retirement or disability. These agreements can be arranged to require the purchase of your interest by the business, by other business owners, or by a 3rd party buyer. A well-structured buy/sell agreement is an essential part of a proper estate plan for business.
Fund the Buy/Sell
Once a buy/sell agreement has been established, funding the buy/sell agreement is a critical step to success in your overall financial plan. Funding mechanisms include use of personal funds, creating a sinking fund in the business itself, borrowing funds, installment payments and insurance.
Contact our business succession lawyers by email or call our office to set up a plan to ensure your business and your family are prepared in the event of a major transition.