Ensuring the Continued Success of Your Business
Through Business Succession Planning
Anecdotal evidence confirms that it's human nature to delay necessary business continuity, or succession, planning. But the successful business owner knows it's important to plan, not only for personal, but personnel and business matters, which frequently are all one and the same in the entrepreneurial business endeavor. The purpose of a business succession plan is to ensure that when business owners retire or die, or a key personnel change occurs, the business will continue, and heirs and/or other key executives will be able to efficiently carry on the business' plans. As such, the business succession plan also necessarily dovetails with the entrepreneur's estate plan. As economic conditions change, you should review and adjust your plan through the scheduling of personal regular review, with necessary adjustments made in a timely manner.
The key to successful succession planning lies in defining and clarifying your future intentions and objectives, and matching those intentions and objectives with your resources. This process involves examining a number of facets impacting both your business and personal life, including the following:
• Key assets, both personal and business;
• Your relationship with key personnel and/or family members involved with your business;
• Recommendations from your financial planner/accountant;
• Life insurance, disability insurance, key man insurance, and the like, both in place and available;
• Pre- or post-nuptial agreements;
• Your current Estate Planning documents, including your Will and Powers of Attorney;
• Deeds for any real property owned individually or as part of your business;
• The Articles of Incorporation and Bylaws, Certificate of Organization and Operating Agreement, or Certificate of Formation and Partnership Agreement for your business (if not a sole proprietorship);
• Existing Shareholders’ or Partnership Agreements, or stand-alone Buy-Sell/Ownership Restriction Agreements
• Profit and loss and other financial statements for your business;
• Any personal guarantees or sureties for business debts which you have incurred;
• Any employee stock option programs or similar benefits offered to employees by your business; and
• Any retirement benefits or accounts to which you are entitled.
While this process may seem exhaustive and far-reaching, it should not be overwhelming. The business lawyers of OWM Law routinely work with accountants, insurance professionals, and financial planners to ensure the process is completed as smoothly and as satisfactorily as possible, quarterbacking that process to meet your goals. We are available to help you, through the professional services with skills we offer, in a knowledgeable, timely, and efficient manner.
Appraising Gifting Opportunities in the Remainder of 2012
It’s likely you’ve heard about the possibility of a “fiscal cliff” come January 1, 2013, involving, in part, the federal Estate Tax. This area of the law has, to some observers, been seen as swinging wildly since the “ Bush tax cuts” were enacted in 2001. The compromise to continue those tax cuts, with some important and generous enhancements, was part of The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010; unfortunately, absent further federal legislation, that compromise expires at 12:00 a.m., January 1st. At that time, the largest-ever federal Estate Tax exemption, currently unified with the federal Gift Tax exemption, automatically drops from $5.12 million per person to a relatively modest $1 million each. And while it’s ultimately unlikely that such a relatively modest threshold to taxation would again become law, prudent professional advisors continue to recommend exploring gifting strategies for the remainder of 2012, including, most importantly for purposes of this OWM Newsletter, the gifting of closely-held family stock, provided such gifting is accompanied by a qualified appraisal per the IRS guidelines. We would be happy to discuss your options, and welcome your call for our advice in that regard.
OWM Law sponsoring First Friday celebration in Phoenixville on 10/5/12 - please visit our table.
David A. Megay, Esq., speaking at SCORE Business Planning Seminar on 11/5/12 - "Starting Your Own Business" (contact SCORE at 610-327-2673).
David A. Megay, Esq., speaking at Chester County Night School Seminars at Owen J. Roberts High School, Pottstown, PA, on 9/26/12 - "Ask the Lawyer: Legal Tips on How to Buy and Sell Real Estate in Pennsylvania," and on 10/17/12 - "Ask the Lawyer: Starting Your Own Business: A Legal Standpoint" (click here for more information).
Kathleen M. Martin, Esq., speaking at Chester County Night School Seminars at Owen J. Roberts High School, Pottstown, PA, on 9/26/12 - "Elder Law Issues," and on 10/10/12 - "Beyond the Simple Will," and at Pierce Middle School, West Chester, PA, on 10/2/12 - "Elder Law Issues" (click here for more information).
James C. Kovaleski, Esq., and Jamie V. Ottaviano, Esq., speaking at the Annual Educational Conference of the Huntington's Disease Society of America on 10/21/12 at the Spring Garden Reception Conference Center in Middleton, PA (contact 717-939-4003).
Read Legal Ease every other Sunday in the Pottstown Mercury.
Watch Legal Talk, brought to you by OWM, on PCTV, Tuesdays at 8:30 on Channel 28, and Thursdays at 9:30 p.m. on Channel 98, or on our website at www.owmlaw.com/legal_talk/legal_talk.php.