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Business Succession Planning

Our Five-Step Planning Process

You built it and watched it grow — by now, your business could be your greatest asset.
Our planning professionals can assist you in determining the business succession approach that will help you maximize the wealth that's tied up in your business, and secure the future for you and your company. 

Determine when.
Do you want to transfer ownership all at once, over several years or at death via your estate? This decision may depend on the current state of your business and on your personal and financial goals. By developing a business succession plan early, you help ensure your business will be ready for a transfer of ownership when you are.

Choose the owner.
The ultimate distribution of ownership depends upon your overall objective. Possible future owners can include:

  • Family members who already participate in the business
  • Family members who do not participate in the business
  • Other co-owners or employees of the company
  • An outside third party

Each type of owner will have different issues to address. For example, if you are transferring ownership to your children who are already actively involved in the business, you'll need to determine how to compensate your other children who are not involved in the business.

Decide how to transfer.
Our planning professionals can help you determine the transfer option that will best help you achieve your financial goals. We will review your personal financial objectives, estate plan and income sources after retirement. Depending on your situation, you might consider selling or gifting, or some combination of both.

Select future management.
An essential part of succession planning is selecting the successor manager and key employees you would like to retain. It's important to consider the level of training and preparation the future manager will need and who your customers, suppliers and business contacts will readily accept.

By having a clear, well-considered plan in place you help ensure that you can retire when you are ready without worrying about the ongoing management of your business.

Create a management transfer timeline.
The transfer of management responsibilities can occur upon your retirement, or you may prefer to gradually phase-out your involvement over time. Do you want to work less now? How long do you want to stay active in your business? Either way, be sure to have a contingency plan and the necessary documentation in place should you become incapacitated.

City National, as a matter of policy, does not give tax, accounting, regulatory or legal advice. The effectiveness of the strategies presented in this document will depend on the unique characteristics of your situation and on a number of complex factors. Rules in the areas of law, tax and accounting are subject to change and open to varying interpretations. The strategies presented in this document were not intended to be used, and cannot be used for the purpose of avoiding any tax penalties that may be imposed. The strategies were not written to support the promotion or marketing to another person any transaction or matter addressed. Before implementation, you should consult with your other advisors on the tax, accounting and legal implications of the proposed strategies based on your particular circumstances.