Malleo Financial Services

Michael A. Malleo 

Phone: 201-321-7041

mike@malleofinancialservices.com

 

Terms of Notarial Acts:

Acknowledgement – Certifying that a signer personally appeared before the Notary, was identified by the Notary, and acknowledged freely signing a document.

 

Malleo Financial Services is a proud member of ALTA (American Land Title Association), the American Society of Notaries, and the National Notary Association (NNA). We're also a Fidelity National approved closer. 

 

FIDELITY APPROVED CLOSER
FIDELITY APPROVED CLOSER

 

*The opinions expressed on this website are strictly those of Malleo Financial Services, LLC and not those of ASH Brokerage Corp.., or any of our affiliates.

 

*Malleo Financial Services LLC cannot and

will not give any tax or legal advice.

 

Business Succession Planning

Have you identified a successor?

Do you have a buy-sell agreement in place?

 

The Issue

 

Jack has created a successful franchise in which he is now owner and operator of eight grocery stores, and the franchise makes up more than 90 percent of his current estate assets. His wife, Jill, is not involved in the business, so Jack is concerned about what Jill would do if he were to pass away and she had to sell the business for liquidity. No family members or employees have been identified as potential successors. However, several store managers are more than qualified and have played a large part in the success of the franchise.

 

 

The Solution

 

First, Jack purchases a personally owned Term life insurance policy to protect Jill against the possible forced sale of the business in the event of his death. Jack then identifies two store managers who are best prepared to successfully own and operate the business upon Jacks’ exit. Jack enters into a One-Way Buy-Sell Agreement with each employee, using life insurance as the funding vehicle. The premiums are financed through an “Executive 162 Bonus Plan” (the business can use tax-deductible company funds to selectively provide benefits to key people). Additionally, Jack promises them a future “stay bonus” (bonus paid to key employees to remain with the company’s new management) which will create an incentive for them to remain in the business known as “golden handcuffs”. Jack knows that if he should die, Jill will be taken care of and his business has better chances of continued success.

 

An unexpected death could force your family to liquidate your business for less than what it’s worth – create a plan to protect your family and business.

 

 

For a free consultation, please contact us for an appointment.

 *This blog is strictly the opinion of Michael A. Malleo and not those of

ASH Brokerage Corp., nor any of our affiliates.

 

Malleo Financial Services LLC cannot and will not give any specific tax or legal advice.

Please consult your tax professional or legal professional for such advice.