Business Succession Planning

Defined as a strategy for passing each key leadership role within a company to someone else in such a way that the company continues to operate after the incumbent leader is no longer in control.

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Succession planning ensures that businesses continue to run smoothly after the business’s most important people move on to new opportunities, retire or pass away.

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For small, family-owned companies, succession planning often means training the next generation to take over the business. A larger business might groom mid-level employees to one day take over higher-level positions.

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In a partnership, one method of succession planning has each partner purchase a life insurance policy that names the other partner as the beneficiary.

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That way, if a partner dies at a time when the surviving partner otherwise wouldn’t have enough cash to buy the deceased partner’s ownership share, the life insurance proceeds will make that purchase possible.

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This type of succession plan is called a cross-purchase agreement and allows the surviving partner to continue operating the business.

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Contact LRJ&A and schedule an appointment to discuss your succession plan with one of our insurance professionals.