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The Law Offices of Kennedy & Jackson
Houston, Texas
713-783-7444 | Email
If you own an interest in a closely held business, especially a family business, it is critically important to get knowledgeable legal and financial advice regarding business succession strategies — if you want the business to continue after the deaths of the current partners.
A buy-sell agreement should be part of any estate plan for a family that owns one or more businesses. Creating a buy-sell agreement for ownership interests in a family business provides protection — for the business owners and the business itself — in the event of major life changes such as divorce, incapacity or death.
One problem with owning a closely held business is that — after the death of one of the partners — estate taxes may be difficult to calculate because it can be difficult to estimate the value of a closely held business with limited value on the open market.
Drafting a buy-sell agreement helps fix the value of the business for estate tax planning purposes, so that your surviving family members are not overtaxed after your death. The buy-sell agreement also provides a market for your family members to sell their inherited ownership interest in the business after your death.
Will White and Barbara Brown are partners in a closely held business, each doing half the work and receiving half the profits. Will White dies, and his 50 percent interest in the business passes to his wife, Wanda White, who has never been involved in the business. Now, Barbara Brown is doing all the work but receiving only half the profits, because half the profits are going to her original partner’s wife, Wanda White.
Wanda White wants to sell her business interest but there is no ready market. Using a buy-sell agreement, Barbara Brown can agree ahead of time to buy Will White’s interest in the business upon his death, divorce or incapacity. With a buy-sell agreement in place, usually supported by a life insurance policy on each partner, the remaining owners can buy out the inherited owners and continue operating the business.
For decades, The Law Offices of Kennedy & Jackson has focused its legal practice exclusively on matters relating to estate planning, asset protection and probate administration. Our attorneys — each of whom is board-certified in estate planning and probate law by the Texas Board of Legal Specialization — represent businesses, individuals and families throughout Houston and the surrounding counties.
Our law office is located in the Galleria area of Southwest Houston, with free on-site parking available next to our office building. We provide a complimentary — and confidential — initial consultation to all new potential clients.
To schedule an appointment with one of our lawyers, call 713-783-7444 or send us an email.
Business succession planning is comparable to estate planning for your company. For many of the same reasons you need a will or trust, your business needs a succession plan. A business succession plan contributes to the continued prosperity of your company.
At Kennedy & Jackson, our lawyers have helped counsel many family-held businesses on the effective transfer of ownership, and have helped many other business entities increase their bottom line through effective planning techniques. If you own a business, contact us today to schedule a free initial consultation to discuss better options for your company.
There are many taxes that can be incurred in the transfer of ownership if proper planning steps are not taken to minimize these costs. Death, divorce and other events can cause the value of a successful company to plummet. However, with effective plans in place, the value of your company will be maximized and you can also avoid creating difficult family situations. At Kennedy & Jackson, we want to help make sure you are protected. Work with us and feel confident that you are making the best decisions possible about the future of your company.
We structure complex transfer strategies, including drafting of effective buy-sell agreements. These buy-sell documents are essential to protect your company and make sure that your company will survive. We want you to be confident that your business is protected for anticipated transfers as well as unforeseen events that can occur. Buy-sell agreements provide instructions and planning for the distribution of assets in the event of the death or disability of a company’s owner. We draft these plans to protect the interests of the owner’s family, estate, and the other owners in the company.
Whether you are looking to protect the best interests of your loved ones, save your company for the sake of your employees, or just avoid paying unnecessary estate taxes, we can help. Contact us today to schedule a free initial consultation.
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