Get peace of mind!
Get peace of mind!
If you own a business, then there will come a day when you will be out of business, one of following five ways:
What we do is make sure that no matter which way you get out of business, you get out at maximum profit. With that in mind, can we talk?
If you don't have a written business succession and continuity plan, with the necessary funding in place, your survivors and heirs will almost certainly end up in litigation after an unforeseen event forces them to figure things out the hard way. Call us today, and we'll analyze your business needs, help you and your partners get your plan in place, with guaranteed funding, so that you don't have to worry about the "what ifs" of life.
Every owner has needs and goals, and they will change over time. Our goal is to be there in the future, not just to make one sale today. We want to grow with your business. Call us today for a personalized business planning assessment and find out how we can help protect your business from the financial risks associated with both planned and unplanned exits.
Please contact us if you cannot find an answer to your question.
A Buy-Sell Agreement is a contractual agreement that restricts the transfer of shares in a business. Usually, Buy-Sell Agreements provide the business or other shareholders the option to purchase the business interest of any owner who dies, retires, or becomes permanently disabled. Often, the buyer is required to buy and the seller is required to sell under the agreement. In other situations it is set up so the other owners merely have the right of first refusal. In other cases, the remaining owners have the first right to buy shares of the exiting partner and for any share they do not redeem, the company is required to purchase the remainder of the shares. In this way, each owner or their estate is restricted from selling shares to anyone other than the remaining owners or the company. It could also avoid a situation in which the remaining owners are in business with the deceased owner’s family.
Yes. It is almost always the lowest cost solution compared to the other sources of funds, with the added benefit of providing funds at the exact time when they are needed, on a guaranteed basis, without having to gamble on the possibility of other sources of funds being available, such as cash, loans, or sale of business assets, especially when the need is for liquidity at death, or when an owner becomes disabled, or when an owner suffers a critical illness.
The value of every company changes over time, so we generally recommend an annual review. In order to have an easy transition, an accurate valuation is needed to avoid challenges to the Buy-Sell Agreement’s legitimacy. The goals of owners will almost always change over time as they move through life, so the agreement should be updated to reflect those changing goals. Life and disability insurance product features have changed dramatically over the past several years offering benefits that were previously unavailable such as coverage for critical and chronic illness on life insurance, as well as new riders and improvements in various disability policies.
Key person life insurance is insurance on a key person in the business. In a small business this can be a number of people such as: an owner, an essential manager, a top sales person, a skilled machine operator/repair person, or an artisan. Anyone whose absence would place the business in jeopardy or whose loss would damage the revenue stream of the business is a key person. Insurance benefits replace the lost revenue and profits in the near term, as well as provide bridge funding until their replacement can be recruited and trained.
A non-qualified plan is a type of tax-deferred, employer-sponsored retirement plan that falls outside of Employee Retirement Income Security Act (ERISA) guidelines. Non-qualified plans are designed to meet specialized retirement needs for key executives and other select employees and can act as recruitment or employee retention tools. These plans are also exempt from the discriminatory and top-heavy testing that qualified plans are subject to.
Highlights
• Non-qualified plans are retirement savings plans.
• They are called non-qualified because unlike qualified plans they do not adhere to Employee Retirement Income Security Act (ERISA) guidelines.
• Non-qualified plans are generally used to provide highly compensated executives with an additional retirement savings option to make up for the reverse discrimination they suffer due to laws and regulations governing qualified plans, such as 401(k), 403(b), or 457(b) plans.
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An executive bonus plan or arrangement (IRS Code Section 162) is a non-qualified plan that can be an effective tool to reward key employees or owners while also providing a tax deduction for the closely held business owner.
An executive bonus plan lets the owner or chosen key employees purchase life insurance on their lives. Besides providing a death benefit in the event of premature death, the cash value build-up can be accessed to meet key employees' needs such as:
• Supplemental retirement income
• Liquid source of funds for emergencies and opportunities
• Estate liquidity
• Living benefits for Critical, Chronic, and Terminal Illness
• Provide for other needs such as college funding, down payment on a lake-house or boat, etc.
With an executive bonus plan, the employee takes the bonus as income and the employer receives a current deduction for the premiums paid under IRS Code Section 162.
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Life Solutions, a Brokerage General Agency
(800) 680-5596 Toll Free
Dallas, Texas
Monday - Thursday: 8 AM - 6 PM
Friday: 8 AM - 5 PM
Saturday: 9 AM - Noon
Sunday: Closed
After hours by appointment.