Why Succession Planning Matters
Continue growing your business while confidently planning your exit.
As a business owner, you focus on the practical aspects of running your business. But without a long-term plan, you may be leaving money on the table. Proper planning to exit your business is just as important as the planning required to start it.
Start by Examining Where You Are
- Is the majority of your wealth in your business?
- Will the income from the sale’s proceeds replace your current business income?
- A re you optimizing your business value to increase the future sale proceeds?
- Have you planned and budgeted for the future to assess your post business income needs?
- A fter taxes, will you still have enough to live comfortably?
- Have you assessed the tax implications of various transition scenarios?
- Have you shared your plans and goals with your family?
The choices you make now correlate to and impact the future of your business.
PLAN FOR A FINANCIALLY SECURE FUTURE
- While you grow your business, plan on how the business will secure your retirement.
- If family succession or third party management is part of your exit plan, instill the necessary leadership in your successors to carry on your legacy
- Create a written plan to transfer your knowledge and experience.
- If selling to a third party, learn how to increase the value of your business by creating a foundation where it can continue to thrive after you have moved on.
- Various wealth planning vehicles may mitigate or eliminate the consequences of taxes when the business changes hands.
- Various estate planning vehicles may mitigate or eliminate estate and gift taxation on death.
KNOW THE ELEMENTS OF A SUCCESSFUL EXIT
- Envision your next steps.
- Create a structured exit strategy.
- Ensure proper retirement and estate planning.
- Coordinate with your banking and tax advisory team.
- Optimize business growth and value.
CREATE AN ACTIONABLE ROAD MAP
- Create the future you desire by designing a written road map with action steps.
- Align implementation steps with your exit plan.
1 Based on a City National Bank survey of its Private Bank clients conducted in April 2020.
Important Disclosures
This document is for general information and education only. It is not meant to provide specific tax guidance. The information in this document was compiled by the staff of City National Rochdale (City National) from data and sources believed to be reliable, but City National makes no representation as to the accuracy or completeness of the information. The opinions expressed, together with any estimates or projections given, constitute the judgment of the author as of the date of the presentation. City National has no obligation to update, modify, or amend this document or otherwise notify you in the event any information stated, opinion expressed, matter discussed, estimate, or projection changes or is determined to be inaccurate.
City National, its managed affiliates and subsidiaries, as a matter of policy, do not give tax, accounting, regulatory, or legal advice, and any information provided should not be construed as such. Rules in the areas of law, tax, and accounting are subject to change and open to varying interpretations. Any strategies discussed in this document were not intended to be used, and cannot be used for the purpose of avoiding any tax penalties that may be imposed. You should consult with your other advisors on the tax, accounting and legal implications of actions you may take based on any strategies or information presented taking into account your own particular circumstances. Trust services are offered through City National Bank.
This presentation is not to be construed as investment advice or as an offer, or solicitation of an offer, to buy or sell any financial instrument. Financial instruments discussed in this presentation may not be suitable for your individual circumstances. You should make your own investment decisions, using an independent advisor if prudent, based on your own investment objective and financial situation.
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