Business Succession Planning

Securing Businesses Assets with LegacyArmour

Many small to mid-size business are owned and operated by a single, core leader who is frequently the founder of the company.  They spend a great deal of time and effort planning on the next quarter of sales and delivery but frequently spend little time planning on what happens when they retire or pass away. If they pass away without a plan in place, the business they worked so hard to establish and grow could be jeopardized.  We at LegacyArmour believe that Business succession planning should be a top priority for businesses of every size.

The revenue from a small business likely accounts for the largest component of its owners’ net worth.  Clever and successful owners protect the future of their companies as much as they protect their current revenue by storing their most important digital assets in LegacyArmour vaults.

LegacyArmour provides comprehensive security plans that include digital vaults that can accommodate up to 2TB of storage with its content automatically delivered to designated recipients/beneficiaries if something happened to the business owner. The general recommendation is to have an authenticated digital document securely stored online with instructions to locate the hard copy (if required).

Examples of Business-Critical Succession Planning Assets[1]

A Will

At the very least, every business succession and personal estate plan should include a will. This document allows them, owner, to specify how their assets would be transferred, and to whom, after they die. Wills also identify an executor who carry out the will owner’s instructions and manage the transition of the business.

An important inclusion in the LegacyArmour digital vault is a list of all online bank accounts, email accounts, file sharing sites, social networking sites, and their corresponding passwords. If the business owner is the only person running the business, this important information needs to be immediately accessible to the owner’s heirs to prevent any damage to the company. In some states, not even family members or appointed executors can access these accounts if they don’t already have the information.


Like a will, a trust allows businesses to control what happens to their business-critical assets if one of the owners die.  Trusts have several advantages over a will. Any items placed in the trust will bypass any probate processes. This makes assets owned by the trust more easily and quickly transferable to heirs, and since it doesn’t go through probate, the details are kept private. Depending on the kind of trust, it could also reduce both legal fees and estate taxes. With a revocable or living trust, the terms and assets can be easily changed if any decisions change.

Power of Attorney

Every business with one or more employees has payroll obligations.  The owners should consider creating a general power of attorney document, which names an individual who can carry out business affairs if the owner becomes incapacitated. If a power of attorney is not in place, and something happens to the owner, the courts will appoint someone to handle their affairs. Why would anyone leave this to chance?

Buy-Sell Agreement

Cyber Conflict Cyber War Versus Cyber RealityIf a business has multiple owners, a buy-sell agreement is a must. This contract establishes an agreed upon plan for the business’s future should one owner die or become incapacitated, says financial planner Paul Pagnato, who specializes in advising business owners. The agreement defines a sale price for the business and each share and allows each owner to document whether they want their partners to buy out their share, whether they want to block certain people from stepping into the business, or if they would prefer family members to sell their portion. Since the price has already been determined, the family will have peace of mind that they are receiving a fair price. Without one, the business owner’s beneficiaries may be stuck running a business they have no interest in, don’t want, and can’t sell—and their partners may end up with a partner they never anticipated and don’t wish to work with.  For these reasons, Pagnato recommends drafting the agreement as soon as the business has value and cash flow is positive.


To raise the funds necessary to buy out a deceased partner’s share under a buy-sell agreement, the living partners often need life insurance. The easiest way to do this is for each partner to purchase a term life insurance policy and name the other partners as beneficiaries. One can even set up an irrevocable life insurance trust to avoid having the insurance proceeds count as part of their taxable estate. This will ensure that surviving owners receive tax-free capital to purchase the other’s portion of the business from the estate. “This does not have to come out of your pocket. It is a business expense and you should have the business pay those insurance premiums,” says Pagnato.

Whether one co-owns the businesses or is the sole owner, he/she should also buy a separate term life insurance policy that names their spouse and children as beneficiaries. This will give the owner’s family time to adjust to life without their income and avoid financial hardship. This is critical since a buy-sell agreement can take time to complete.  Insurance will provide funds if there aren’t other sizable resources.

Succession Plan

If the business owner is a sole proprietor, they will need a clear plan for what should happen to the businesses when they die. If they want to pass on the business, they need to begin delegating and preparing a successor. If they’d prefer that the business is sold, they can help their heirs by doing research ahead of time that will make selling easy and inexpensive.

To prevent disagreements and ensure that things happen as they want them to, most financial planners recommend creating a document that outlines their wishes for the business’s future. This document should clearly lay out important information about what the business owns and owes, and include a detailed list of accounts and passwords.

Other Digital Assets

Most businesses have more digital assets than they realize. These can include:

  • Products and Services
  • Business Plans
  • Intellectual Property & Trade Secrets
  • Other confidential information
  • Employee private information (SSN’s, performance reviews, banking info)
  • Financial Data
  • Customer, Vendor, & 3rd party proprietary and confidential information

Call us for a Demo Today on how LegacyArmour’s corporate plan can augment or replace your businesses’ insurance plans by storing critical digital assets in encrypted vaults that are automatically shared with authorized personnel based on pre-configured events taking place such as death or incapacitation for a fraction of the cost.

It’s like business planning in a box,” says Sahar Ismail, CEO of LegacyArmour. “We make planning for the future quick and easy, allowing you to concentrate on your business today without worrying about tomorrow.”

[1] “Business succession planning – Deloitte.” Accessed 27 Nov. 2017.