Succession Plans set forth the business owner’s desire and strategy for management of the business after the owner’s death.
A succession plan is often required as a pre-condition to financing approval by a bank to secure the value of the business in the untoward event of the owner’s death. A succession plan agreement is executed and notarized by the owner and his or her nominated successor.
Additionally, depending on whether the business is a corporation, partnership or limited liability corporation, a stock purchase agreement or an amendment to the partnership or limited liability agreement may be negotiated. The potential purchase of an insurance policy on the life of the business owner may be required to finance the succession plan.