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Handing Over the Reins
Your business was built on big dreams and careful plans. And there’s no reason to stop preparing and dreaming when you begin to think about transitioning to a new generation. Together with your Farm Bureau agent, you and your business’ future owners can create a strategy that fits the needs of everyone.
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Prepare Early
The best time to craft a strategy for handing over your business is when you’re still years away from retirement. While you’re still in charge, you can collaborate with your future owners on a roadmap for where your business might go in the future.
Seeds for the Future: Business Succession
There are many types of business succession strategies. Below are some of the options your Farm Bureau agent may recommend as you develop your strategy:
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Family Buy-Sell Agreement
Many business owners have a child or other family member interested in taking over their business someday. This agreement gives your business heir the first option to buy the family business from your heirs who are not active in the business. You can set favorable contract terms to make the purchase more affordable, yet still provide fairness for your non-business owner heirs.
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Partnership Buy-Sell Agreement
If you own your business with a non-family partner, a buy-sell agreement can ensure the orderly transfer of your business interest upon your death. The agreement will clearly state how the business assets will be valued and transferred, helping to protect the future of your business and provide fairness to your family.
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Key Person Insurance
The unexpected death of a key employee or manager can hurt your business – lost income or profit, disruption of management and costs incurred to replace the key employee are just some of the areas that could feel the effect. Key Person Insurance can protect your business from the unexpected costs of losing a key employee and provide needed funds when it matters the most.
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Restrictive Executive Bonus
You can provide an attractive fringe benefit for your key employees, designed to retain your best and most valuable employees and embolden their loyalty. Be selective – pick and choose only the employees that help build the success of your business.
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Charitable Remainder Trust
After building a successful business, a charitable remainder trust (CRT) can help you transition some of your assets into retirement income, thus reducing your tax burden, increasing your retirement income and allowing you to make a generous gift to your favorite charities.
Neither the Company nor its agents give tax, accounting or legal advice. Consult your professional advisers in these areas.
