One of the most frequently overlooked components of a succession plan for the owner of a closely-held business is a qualified retirement plan and, in some cases, non-qualified deferred compensation or other arrangements for the business owners and key employees. It is not uncommon to find that the value of a closely-held business owner’s estate is tied up in the value of the business itself. A retirement plan allows a business owner to create a diversified pool of investable assets that are not tied to or linked with the value of the business. Similarly, a well-funded and well-invested retirement plan can provide a source of income that will enable the business owner to feel comfortable in retirement.
The Business Succession Planning Advisory Team includes lawyers who are familiar with the broad range of qualified and non-qualified retirement plan alternatives available to a business owner including:
- 401(k) Plans
- Profit Sharing Plans
- Pension Plans
- Employee Stock Ownership Plans (ESOPs)
- Split-Dollar and Other Insurance Agreements
- Excess Benefit Plans
- Phantom Stock Plans
- Stock Appreciation Rights
Finally, creative planning techniques such as the creation of an Employee Stock Ownership Plan (ESOP) can provide a purchaser in connection with the sale of some or all of a business owner’s interest, while allowing for an orderly management transition. A business owner who sells a business interest to an ESOP can also reap favorable tax benefits and savings. In addition, our lawyers have the skills and experience to ensure that the business owner’s plan remains in compliance with the applicable tax and labor laws.