For many business owners, a good deal of their wealth is tied up in their business. They have likely spent years and years building their businesses and have had little time to concentrate on other things. As they start to get older and begin thinking about needing a will, they should also think about business succession planning. The goal of business succession planning is to create an orderly and certain way for the business owner or owners to pass his or her business to the next generation or a key employee upon death, disability or retirement (often the triggering events for the transfer of a business to the new owners).

These goals are often accomplished by first making sure the business is properly formed and that required legal filings are up to date. It may also involve the use of LLCs, Family Limited Partnerships or other entities to hold business assets. Also very common is the use of a buy-sell agreement where the business owner and the proposed buyer agree to certain terms about the purchase of the business upon a triggering event.

Often, a buy-sell agreement will include the price that will be paid for the business or the method that will be used to determine the price. Additionally, a buy-sell agreement will define the terms of how the sale price will be paid. Upon death, this price is usually paid to the personal representative, usually called the Executor, in Louisiana.

The transfer of a business almost always involves tax issues so a tax attorney or an attorney intimately familiar with tax law should be used for business succession planning.

The transition of a business from the owners to the next generation or to a key employee(s) is often a difficult thing and when proper business succession planning is incorporated as a part of comprehensive estate planning for a business owner, there is a much higher likelihood of a successful transition.

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