The typical business owner’s goal is to exit his or her business with the most wealth on the most favorable tax terms. However, this requires a coordinated team effort.

The ideal succession planning team includes an experienced professional cadre of attorney, accountant, financial planner and life insurance agent, as well as the business owner and his or her heirs. Each of the team members has an important role to play.


The team’s principal jobs are to identify how best to carry on the business after the owner exits, and also to use the most sophisticated tax planning techniques to minimize income and wealth transfer taxes.

Because succession planning involves the future of your business after you leave behind the day-to-day decision making to others and the amount of wealth you are able to pass along to your beneficiaries, it’s critical that your team of professionals be experienced in succession planning. Be careful because many are not and this can be extremely costly to your estate.


An experienced attorney, specializing in succession planning for business owners, is one of the key members of the team. The attorney should be an experienced business lawyer, as well as be familiar with the latest succession planning techniques. Your accountant should be a Certified Public Accountant, up-to-date with the details of your assets and liabilities, and the value of your business. Frequently, we see business owners with an unrealistic notion of the true market value of their business — one of the largest single items of their net worth.


Your financial planner is another important succession planning team member. His or her job is to ensure that your money is at work most effectively to meet your lifestyle goals. He or she needs to evaluate investment opportunities on a regular basis to be certain that your investment strategy, whether conservative or more aggressive, is on target.


Life insurance is another important element of most succession plans for business owners, so your life insurance agent is another key member of the team. The law says that death taxes are due and payable in cash within nine months after your death. Your estate settlement costs can be paid by your beneficiaries advantageously with life insurance.

Here are some of the advantages of life insurance: Dollars are discounted because your heirs almost always get more back than you put in. Payment of benefit is prompt. Normally, there is no income tax on the proceeds. If irrevocable life insurance trusts are utilized, proceeds can be free of estate tax. Generally, such proceeds are not subject to probate. Life insurance provides cash for a predictable and certain need which will arise at some unpredictable moment. For succession planning to work, it’s important for those who control a family business to share their dreams for its future. They need to involve spouses and younger family members so they know what’s expected of them in running the business both during an owner’s business life, and following retirement, incapacity or death.