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Do You Want to Retire from Your Business

Among the most difficult things for an entrepreneur to deal with is determining the right time to step out of the business and the right plan for doing so. It may be that it is time to pass the business on to the next generation of family members who are interested in keeping it going, or that it is time to sell the business or its assets. Business succession involves more than writing a will and dividing assets between one's heirs after death. A successful succession plan takes into consideration the goals and needs of the family members as well as the orderly transfer of responsibility and control of the business. Selling the business outright requires a different plan, although many of the retirement issues are the same.

When does the planning process begin? The business owner can begin considering selling the business or succession planning at any time but certainly when family members become active in the business or the owner feels that the time for retirement is approaching. The early stages of succession planning focus on the family members themselves, identifying each individual's capabilities, experience, expectations, and interest in the business. It may become apparent that not every family member is well-suited for the business, or that there are old issues that need to be resolved among them. During the initial planning, communication is very important and the business attorney can facilitate the identification of issues that might threaten the business in later years.

As the family-business owner begins to create the succession plan, he or she will consider the advantages and disadvantages of the various methods used to transfer a business to one's heirs. Working with the business attorney and accountant, the family-business owner will explore options such as selling the business to family members or other successors, use of a buy-sell agreement, trusts, annuities, installment notes, family limited partnerships, outright gifts and life insurance policies.

If the business owner elects to sell the business outright, then process is more likely to focus on the timing of the sale. When is the business in the best position ro realize the great sale price? Is it better to take on a business partner who will eventually buy the owners shares? Should the owner sell the business entity or the just the assets?

Each plan requires the business owner to contemplate his or her eventual full retirement, possible disability or premature death. Our attorneys are experienced in helping individuals and families prepare for the future with comprehensive business succession and estate planning. Let us assist you in taking care of the business of your life.

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