Podcast: How business owners document success

Brian A. Trzcinski

By Brian A. Trzcinski, CEPA
MassMutual specialist in business market development.
Posted on Sep 15, 2022

The business interest is often the single largest asset of a closely-held business owner’s estate. It’s often responsible for the majority of current income for you and your family and will be looked to as a source of wealth at retirement. Businesses can transition expectedly or unexpectedly whether because of death, disability, retirement, or even a global pandemic. That’s why it’s important to plot a course toward protecting your business and minimizing the impact a change in ownership could have on those who depend on the business most.

If your expectation is to receive full value for the business when the time comes to leave then you should put as much effort into protecting it as you did building it. And perhaps the most important step of all is to document and communicate your plans.

Only about a third of business owners (35 percent) have started the process of planning for succession of the business, with 8 percent seeing it through, according to the 2022 MassMutual Business Owner Perspectives Study. In addition, less than half have discussed their plans with family (47 percent) and internal stakeholders (41 percent).

Succession plans, buy-sell agreements, and estate plans are all critical tools to help ensure the business — and your wealth — transition in the manner you choose.

Yet, the MassMutual survey found that many business owners don’t have critical written documents in place, and thus, may not be able to exit the business on their terms. Indeed, the survey found:

  • Only 53 percent of business owners have a will.
  • 52 percent of business owners have a formal business valuation.
  • 51 percent have an estate plan in place.
  • 32 percent have a buy-sell agreement.

Listen to Estate and Business Planning attorneys Greg Matalon and Leslie Marenco discuss how having documented plans, procedures and agreements in place can help play a role in protecting your business for the long-term.

 

Learn more from MassMutual …

Succession planning for your business

The right business successor: Key to retirement

Estate equalization for business owners: How to do it

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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.