Business Succession Planning

You’ve worked hard to establish and grow a business that has provided for you and your family.
It would be tragic to have your business suffer a major setback or worse, its demise, in the event of your illness or death.  To ensure your business can survive without you at the helm, you should consult with an attorney that can help you craft a succession plan that avoids a disorderly transition.  The Massachusetts business succession planning attorneys at Hutchings Barsamian are here to assist you with this process.

Typically, if there is no plan in place, the business owner’s stake in the business is transferred to
his or heir heirs or beneficiaries, who may not be ideal in terms of managing the business. Worse, this can lead to disputes between siblings or other beneficiaries, as some who have been involved in the business are all of a sudden faced with “new partners” who have no understanding of how the business operates.

Another issue is that if any existing shareholders want to purchase shares in the business from new owners who have become shareholders as a result of the passing of a prior owner, they may not have the necessary cash to do so.  
An estate planning attorney with expertise in estate planning and business succession can help owners put together a plan that addresses these issues and facilitates a smooth transition. Typically, succession plans are crafted after all business stakeholders and family members are consulted regarding the future organizational structure and management of the business.

While every succession plan is customized to the situation at hand, owners have a number of common issues and concerns.  Sometimes there are key employees that need to be incentivized with a slightly larger stake so they do not leave the business.  Other parties may want to be granted the right of first refusal, or the ability to accept or reject the shares of the exiting or deceased owner before they are offered to others.  To ensure such potential buyers have the necessary cash to purchase the shares, a life insurance policy may be obtained to fund them. Valuation is another key issue; the price of the shares should be based on a mechanism set forth in the succession plan.

In addition to business issues, there are also concerns about gift and estate taxes associated with the transfer of ownership in the business.  There are various measures that can be undertaken to reduce this burden during the planning process.   For example, arrangements can be made to transfer the owner’s interest into a trust for the benefit of family members.   

With so many complex business, estate and tax issues involved, it is critical to work with an attorney who understands these matters to ensure your life’s work does not go to waste.  If you are an owner or stakeholder in a business, the skilled estate planning and business succession attorneys can put your mind at ease.  We serve the areas of Weston or Hingham, Massachusetts and can be reached at our office in Wellesley Hills at (781)207-1717.


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110 Cedar Street, Suite 250, Wellesley Hills, MA 02481
| Phone: 781.431.2231

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© 2015 Hutchings Barsamian Mandelcorn, LLP | Disclaimer | EP News
110 Cedar Street, Suite 250, Wellesley Hills, MA 02481
| Phone: 781.431.2231
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