Succession Planning and Exit Strategies

Members of our Business Law, Tax, and Trusts and Estates Practices regularly advise owners and management about business succession issues and exit strategies. Clients are encouraged to think of succession planning not simply as a single career-ending event, but as an ongoing process to build value, with an eye on a possible future event resulting in ownership and/or management succession.

For some, the vision will be focused on extracting the maximum portion of the business's value for the current owners from an eventual sale to, or merger with, a third party. For others, the vision will involve transfers to existing partners, family and/or management and a long-term ownership succession plan.

Our attorneys have extensive experience in advising business owners and families with many different techniques that can be used to maximize value and minimize federal estate taxes and income taxes in these succession plans. Techniques most frequently used include:

• Buy-sell contracts (cross-purchase or entity repurchase)
• Employee stock ownership plans (ESOPs)
• Mergers/Sales to third parties on a taxable, tax deferred or tax-free basis through one-on-one negotiations, controlled auction and broader auction
• Stock options and restrictive stock plans for key employees
• Gifting and other techniques with family members, such as installment sales, grantor retained annuity trusts, redemptions, installment sales to grantor trusts, insurance trusts and other like arrangements
• Recapitalizations to create preferred or nonvoting stock
• Recapitalizations to extract value with a simultaneous investment by an investor
• Long-term employment arrangements
• Deferred compensation and salary continuation plans
• Ownership of business assets outside the business entity (e.g., personal goodwill, intellectual property or real estate)

We welcome the opportunity to work on a collaborative basis with our clients' other advisors including appraisers, accountants, insurance professionals and trust officers to develop a coordinated plan best suited for each individual client.