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Financial Health

for Healthcare Professionals

Succession Planning for Your Business

PROVIDED BY HOWARD WOLKOWITZ, • Your successor(s) – who
A FINANCIAL PLANNER WITH COASTAL WEALTH, will take over and are they pre-
COURTESY OF MASSACHUSETTS MUTUAL LIFE pared?
INSURANCE COMPANY (MASSMUTUAL) • Ownership – what will
future owner roles be, and what
It may be hard to imagine right now, but odds are the busi- will the ownership percentages
ness you’ve worked so hard to create will be owned by someone look like?
else in the future. Eventually, you will either give up the helm • Management – how will
voluntarily when you retire, or involuntarily as the result of an you keep key employees on
unexpected event. board through the transition
and beyond?
Charting a path for your small business • Transfer plans – what are
Succession planning helps you specify, in writing, what will the steps involved in the trans-
happen to the business when you retire, become disabled, die fer, and what is the timeline? PROVIDED BY HOWARD
prematurely, or otherwise step down. It is not a one-time event, • Triggering events – what WOLKOWITZ, A FINAN-
but instead a continuous process that starts with your goals, events (death, disability, retire- CIAL PLANNER WITH
and builds and improves over time. Your succession plan is also ment, divorce, bankruptcy) will COASTAL WEALTH,
a roadmap for you, your family and your employees to help start the transfer process? COURTESY OF
ensure that, in the event you are no longer able to run the com- • Purchase price/financing – MASSACHUSETTS
pany, any ill-advised decisions are kept to a minimum. By cre- Where will the funds come from MUTUAL LIFE
ating a succession plan today, you can make the decisions now for a buy-out and what are the
about what will happen to your company in the future. tax implications? INSURANCE COMPANY
(MASSMUTUAL)
What goes into a succession plan? Other considerations
Like any strategy your business may already have in place, a Your succession plan will also
succession plan follows the same principles. It should address have an impact on both your retirement plan and estate plan.
the who, what, when, where, why and how you would like to Some additional considerations you will need to keep in mind:
transition your business. Your professional tax advisors will be • Value of the business: You need to know the true value of
able to provide you with detailed guidance on setting up a suc- the company so you are confident the succession plan is accu-
cession plan customized for you and your company. Generally rate. Keep tabs on company value regularly (every three years)
speaking, your succession plan should address the following: and update your succession plan to account for any changes
• Your goals – what do you want from the business when you • Estate Equalization: If a family member who works in the
exit?
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4 August 2018 southfloridahospitalnews.com South Florida Hospital News