Florida Business Succession Planning Checklist

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    Florida Business Succession Planning Checklist

    Florida Business Succession Planning Checklist

    If you’re a business owner, a business succession plan will allow for a seamless and trouble-free transition when you decide to exit the business.

    Without one, there will be no clear roadmap on how to act and what to do if you decide to retire, have an emergency or pass away. We’ve seen many clients regret a lack of a business succession plan, as they lose value, shareholders, and clients and have seen their efforts go to waste.

    Even if you’re the sole employee, we advise you to create a business succession plan.

    Florida Business Succession Planning Checklist

    Please follow our Florida business succession planning checklist to help you get started. We welcome you to contact our Florida estate planning lawyers for a free consultation too.

         1. Discuss the Future

    The first step to take is holding conversations. You’ll need to talk to your co-owners, employees and family to determine who will eventually replace you when the time is right.

    By having these conversations, you can see who has the metal and desire to be a business owner. This is not a role for someone who doesn’t see themselves taking over. Often, the wisest choice is to go for a trusted family member.

    Read Related: The Life Events That Call for an Estate Plan Update

         2. Make a Choice Over Future Owners

    Once you’ve talked to potential candidates, it’s time to make some choices.

    • Who do you want to be the future owner?
    • Who should run the business temporarily if you are ill or hospitalized?
    • Is the owner who would take over in 5 years the same person who would in 10,15 or 20 years?
    • Ensure the candidate knows what would be expected of them and has confirmed their commitment.

         3. Create a Management Succession Plan?

    Now it’s time to put your plans into writing. What is your vision? Over-planning here is better than under-planning.

    • Cover all scenarios such as:
      • Retirement
      • Death
      • Emergency
      • Illness
      • Vacation or sabbaticals
    • What training and resources are required to allow the new owner to succeed?
      • Training and Education
      • Mentorship
      • Access to systems
      • Financial resources
    • What logistical issues and marketing requirements should be shared?

         4. Life Insurance

    Next, acquire a life insurance policy. This is critical to ensure your family is financially supported if you pass away.

    But also, it will benefit your business as it serves as your ‘transfer vehicle’. For example, if you pass away before divesting from the company, then death benefits on the policy will be used to buy out your share of the business, allowing it to be distributed to business partners.

         5. Create a Buy-Sell Agreement

    Buy-sell agreements determine what happens if you pass away or leave the company. This Agreement usually allows your share of the business to be sold and shared among the remaining business partners.

    You can even have life insurance policies for each partner. This is known as a cross-purchase agreement.

         6. Do You Want a Family Retirement Plan?

    Your family’s future shouldn’t be neglected when thinking of your business.

    When you retire, will you have the means to support your family without your business? It may be wise to hold onto your share of the business, so you can still earn dividends until you’re bought out.

         7. Confirm the Business Entity

    You should also consider making sure that you have the property business entity set up.

    Many people establish LLCs or family limited partnerships, which allow them to gain better protection for their business assets.

         8. Consider a Revocable Living Trust

    A revocable living trust is also often advised. These types of trusts can hold ownership of assets and business interests, allowing them to skip probate and benefit from asset protection.

    While you’re alive, you’ll serve as your own trustee and beneficiary to maintain control of the business despite the trust holding ownership. You can then name a successor trustee to take over when you die or become incapacitated.

         9. Create a Personal Estate Plan

    Finally, don’t forget your personal estate plan. The two are intertwined and you should ensure that the distribution of all rewards from your business’ efforts are carefully planned out.

    • Create a will
    • Consider creating a trust
    • Appoint a power of attorney

    Contact an Estate Planning Attorney Today in Pinellas County and Hillsborough County

    If you want to create a business succession plan in Florida, our expert legal team can help. From drafting trust documents to setting up an LLC, our team regularly helps business owners like you.

    We welcome you to contact our Florida estate planning attorneys today for a free assessment if you have any questions or wish to get started.

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    Battaglia, Ross, Dicus & McQuaid, P.A. is U.S. News and World Reports Tier 1 law firm in Florida, specializing in Estate Planning & Probate since 1958. With Award-winning experienced estate planning attorneys, they can help you create an estate plan that protects your rights and wishes.

    Schedule a free assessment today to get started.

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