Strategies for Successful Business Succession Planning

Connecticut Business Succession Attorney

Business Succession strategies enable a parent (through a limited family partnership for example) to transfer a business, and business assets to his/her children with asset protection and tax sheltering advantages. Succession strategies can also assist a partnership to maintain an orderly control of its affairs and prevent interference by families of deceased partners. For assistance with business succession strategies, you are urged to contact a Connecticut estate planning lawyer who can help you with your business succession planning.

Business Succession Strategies

A parent may establish a family limited partnership. He establishes his children with limited partnerships but retains a tiny percentage for himself as the general partner but retains control. He may have to pay a gift tax on his gifts (depending on the excess of these gifts over the annual exclusion amounts) but these are at a discounted value. This is because his children do not have control nor can they sell their interests. But when the parent dies, their interests attain full value as they now have control. Furthermore, they pay no estate tax as the interests already belong to them. This strategy also provides asset protection as limited partnerships interests can be protected from seizure by creditors.

In the case of a partnership, where the various partners are concerned that a partner's family will intrude if a partner dies, there is a succession strategy. The partners all agree to buy out the interest of a partner when he dies and/or becomes disabled. They achieve this by having an attorney draft a Buy-Sell (or Buyout) Agreement. They get the business appraised by an outside party and agree to that as a set price for computing a partner's buy-out figure. Then they each buy life and/or disability insurance on the other partner. When a partner dies, the other partners use their insurance proceeds to pay off the decedent's relatives for his share.

Business Succession Lawyer Serving Greenwich, Stamford, Darien, Westport, Fairfield, Trumbull, New Haven and Milford

At Massih Law, LLC, I provide experienced business succession legal services to clients throughout Fairfield County and New Haven County including, but not limited to, Greenwich, Stamford, Darien, Westport, Fairfield, Trumbull, New Haven and Milford. When I meet with a client, I learn of his or her succession situation and offer them options. I then work to put the business succession plan they choose into action. If I can be of assistance, I would be pleased to meet with you to discuss your specific situation and advise you of how best to arrange your affairs to lead to a successful business succession.

Contact a Connecticut Business Succession Attorney at the firm if you seek guidance for business succession planning.