Business Succession Planning is a funded agreement between the partners of a business or other asset that sets out the actions that will take place should one of the partners not be able to continue in the ownership of that business or asset.
If you own a business or asset in partnership with another party consider the implications to your financial situation if your partner were to say, die.
Many people don't realise that unless you have a properly funded Business Succession Plan you are now in partnership with the deceased partner's estate. This means that the estate is entitled to the same benefits from the business/asset as the deceased partner was, including a share of the profits, making decisions in the business, and so on.
Consider the other side of the story. If you were to die, your estate would be in business with your partner. Do they have the financial resources to purchase your shares? Will they pay a fair price? Can they effectively manage the business?
A properly structured and funded Business Succession Plan will solve all of these problems. Quite simply the agreement will be funded by a life insurance policy on each of the partners' lives. In the event of death, the deceased partner's estate would receive the policy proceeds in full settlement of the deceased's shares in the business, and the estate would transfer those shares under a put and call option deed to the surviving partner. The beneficiaries of the estate have no further involvement and have been paid a fair price for their share.
Let one of our specialist business risk insurance advisers examine your situation and recommend an appropriate solution.