Succession planning can pose many different challenges. Our panelists will discuss figuring out how the next generation comes up with the proceeds to buy out the leading gen sellers. A cash balance plan can help solve that problem by contributing business revenue to pre-tax cash balance accounts, most of which benefit the leading gen, but to some extent benefiting other employees, too. The liability reduces the value of the business and thus cash and loan proceeds buyers need to come up with. The sellers, while receiving a lower purchase price, make up for that by receiving payments from their cash balance accounts, which also could be rolled over to an IRA. In that way, the cash balance plan benefits the buyers and sellers. We will discuss in more detail how this strategy works and which companies would be good candidates for this strategy.
SPEAKERS:
Michael Beers, CIMA®, CRPS®, C(k)P® ,The Fortis Group at Morgan Stanley
Jim Bishop, RICP® CDFA® QPFC®, Morgan Stanley
Greg Daugherty, Porter Wright
Michael Davis, CFP®, Creative Retirement Solutions
