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The Entrepreneur’s Corner

Solidifying the long-term future of your business
Here’s an important question for busy business owners – what’s next for your company? Not just tomorrow or even in the months ahead, but when the time comes that you or one of your key employees retires or leaves the organization unexpectedly?

At a time when many baby boomers are thinking about retirement, those who own a business need to plan not just for their life after work, but for the future of the firm they’ve committed so much of their lives to. In a small- or mid-sized business, the owner and perhaps other key personnel play such a vital role that special planning is required to prepare for circumstances in which any of these individuals is no longer part of the organization. If your business doesn’t have a succession plan in place, it is an issue that needs prompt attention.

There are a number of questions to consider in helping prepare for the period of transition a company inevitably faces. They include:

• Who is in line to follow the principals of the firm? The most fundamental aspect of a succession plan is to have a replacement (or replacements) in line. In many cases, a family business will move from one generation to the next. In other situations, a trusted employee or group of employees may need to be groomed and prepared to assume control of the company in the future.

• How will control of the business be transferred? Once successors are identified, there are a variety of ways that control of the business can be transferred to them. Among the options are an outright sale to the new owner – either in a one-time transaction or an installment sale – or the use of a trust vehicle, such as a grantor retained annuity trust (GRAT) or a grantor retained unitrust (GRUT). Those are irrevocable trusts to which you transfer appreciating assets while retaining an income payment for a set period of time. At either the end of the payment period or your death, the assets in the trust pass to the other trust beneficiaries (the remainder beneficiaries). The value of the retained income is subtracted from the value of the property transferred to the trust (i.e., a share of the business), so if you live beyond the specified income period, the business may be transferred to the next generation at a reduced value for estate or gift tax purposes.

An important consideration in the decision-making process is potential tax ramifications, particularly for the seller. There are tools available to help reduce the potential impact of capital gains, estate and gift taxes when a sale occurs. Good planning plays a critical role in making sure that both the seller and the buyer achieve the most favorable results.

• What forms of protection are in place in case an unexpected event occurs? The need to implement a succession plan can sometimes strike without notice. Businesses that involve partners or likely successors, for example, may benefit from having a buy-sell agreement in place.

A buy-sell agreement lets you keep control of your interest until the occurrence of an event that the agreement specifies, such as your retirement, disability, or death. Other events, such as divorce, also can be included as triggering events under a buy-sell agreement. When the triggering event occurs, the buyer is obligated to buy your interest from you or your estate at the fair market value. The buyer can be a person, a group (such as co-owners), or the business itself. Price and sale terms are prearranged, which eliminates the need for a fire sale if you become ill or when you die. Remember, however, that you are bound under a buy-sell agreement.

Business succession is a complex matter. It involves close work with a financial advisor, tax specialist and an attorney experienced in these types of matters to structure a solution that is most suitable for your business and potential successors.

Justin R. Martin is an associate financial advisor with Ameriprise Financial Services, Inc. Contact him at (804) 320-3105 or .(JavaScript must be enabled to view this email address).
Community

Glen Allen student to perform at Carnegie Hall

Thanks to a first-place win in The American Protege International Vocal Competition 2014, Glen Allen High School student Matija Tomas will travel to New York City to perform at Carnegie Hall in December.

At the first-place winners recital in Weill Hall, Matija will perform Giacomo Puccini’s opera aria, “Chi il bel sogna di doretta.” She will perform with other vocalists from around the world and have the opportunity to win other awards and scholarships.

Locally, Thomas has performed with Richmond’s renowned Glorious Christmas Nights, Christian Youth Theatre, and WEAG’s Urban Gospel Youth Choir. > Read more.

Gayton Baptist Church dedicates new outreach center


The John Rolfe YMCA and Gayton Baptist Church have partnered in an effort to bring greater health and wellness opportunities to the community.

Through this partnership, the John Rolfe Y will run Youth Winter Sports programs, including basketball and indoor soccer, in Gayton’s newly renovated $5.5 million outreach center that features a new gymnasium, youth and teen space, social space with café, meeting space and full service commercial kitchen. > Read more.

Henricus Historical Park to host Publick Day Sept. 20

Henricus Historical Park will commemorate its anniversary during Publick Day, a signature annual event that celebrates the establishment of the second successful English settlement in the New World. In September 1611, Sir Thomas Dale, along with soldiers, tradesmen and farmers, ventured from Jamestown to create the Citie of Henricus. Leaders of Henricus developed the first English hospital, chartered the first college in North America, established tobacco as the first cash crop in Virginia, and created a place where Pocahontas lived and met John Rolfe.

Publick Day will take place Saturday, Sept. 20, from 10 a.m. to 5 p.m. Admission is free and parking is $5 per vehicle. > Read more.

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Entertainment

Extras sought for AMC’s ‘TURN’

Paid extras are being sought to appear in the AMC television series TURN: Washington's Spies, which will begin filming its second season in the Richmond area at the end of September and continue through February.

No experience is required, but producers say that extras must have flexible availability, reliable transportation and a positive attitude.

Arvold Casting is holding an open call on Sunday, Sept. 21 and is seeking men, women and children who are Caucasian, African American and Native American, with thin to average builds and who can realistically portray people living in Revolutionary War times. Long hair is a plus but not a must. > Read more.

Weekend Top 10


TGIF! Celebrate the weekend at Oak Hall Baptist Church’s Community Block Party on Saturday. Learn more about ballroom dancing, art and Colonial times. Or take the kids to Generation Z Games for water play or Southern Season to cook up a Disney-theme meal. For all our top picks this weekend, click here! > Read more.

Weekend Top 10


Check out these three B’s in Henrico this weekend: books, bluegrass and “Born Yesterday.” Other activities to participate in – and feel good about – are the 15th annual James River Regional Cleanup and the 5th annual Richmond Out of the Darkness Community Walk. For all our top picks this weekend, click here! > Read more.

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Highland Springs United Methodist Church, 22 N. Holly Ave., will host a Spaghetti Dinner Sept. 19 from 4:30 p.m. to 7 p.m. The menu includes spaghetti, tossed salad, bread, beverage… Full text

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