I recently read an article in Tucson’s Arizona Daily Star about the need for an exit plan. As an Arizona estate planning attorney, I am very familiar with the need for all business owners to plan for the time when they can’t, or don’t want to, run their businesses.
Mimi, the owner of my favorite Tucson corner café, needs to plan for who will run the café if she were to become seriously injured. Who would Mimi’s husband depend on to keep the business profitable while Mimi is recovering?
John, my auto mechanic in Sonoita, should have a plan so that Carl, his business partner, can buy out John’s interest in the business when John passes. Will Carl have enough cash to pay for the business? Will Carl have enough cash to hire someone to replace John in the shop?
John and Mimi should do what Tom, my dry cleaner did with his business. Well before Tom wanted to retire, Tom created a buy/sell agreement with his key employees. The agreement provided that if and when Tom wanted to sell his business, he would sell the business at a fair price and terms, determined at the time of the sale by a formula in the buy/sell agreement and by the fair market value of the business at the time of sale. Tom and his key employees ran the business for as long as Tom wanted to be involved, with Tom teaching his key employees how to keep the business successful after Tom left.
When Tom decided it was time to retire, he didn’t hesitate to sell his business to his key employees. Since they had already agreed on the terms of the sale, the transfer of the business went as smoothly as the hum of Tom’s new sportscar.
So, what is your exit plan? For your business? For your life? If you don’t have one, are you going to wait until you are seriously ill, or worse? Better yet, come and see us, the experts at Morris Hall, to talk about your exit plan. But do it now, before it’s too late!
About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years. Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, powers of attorney, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects. We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Tucson, Prescott, Flagstaff and Arrowhead. Contact us today at 888.222.1328 to schedule an appointment!