BUSINESS SUCCESSION PLANNING IN LEAWOOD, KANSAS

The ideal time to start succession planning is now, regardless of your business stage. Early planning provides more options and better tax results. You can implement gradual gifting strategies over decades rather than scrambling at retirement. You can structure entities optimally from the beginning rather than facing costly restructuring later.

Most business owners wait too long and lose valuable planning opportunities. We recommend beginning the process at least 5 to 10 years before your planned transition. This timeline allows you to develop leaders within your organization, address tax implications strategically, and ensure a smooth handoff. If you’re asking whether it’s too early, it’s not. If you’re asking whether it’s too late, start immediately.

The timeline varies based on your company’s complexity and specific circumstances, typically 3 to 6 months for comprehensive planning. Simple situations with one owner and clear succession may take 2 to 3 months. Complex situations involving multiple entities, sophisticated tax strategies, or family conflicts require longer timelines, often 6 to 12 months.

Implementation continues over years as you execute gifting strategies, restructure entities, or train successors. Business succession isn’t a one-time event but an ongoing process requiring regular updates as business values change, laws evolve, and family circumstances shift. We work efficiently without sacrificing thoroughness, balancing speed with precision to ensure your plan is complete and legally sound.

Gary Eastman’s unique combination of legal training (J.D.) and business education (M.B.A. in Finance from the University of Kansas) provides critical advantages for succession planning. His background includes three years at Polsinelli, a top 100 AmLaw firm (2002 to 2005), where he worked on over 500 transactions ranging from $500,000 to $10 million, including multiple deals exceeding $100 million.

Over 27 years, we’ve served 5,407 clients and understand both the legal requirements and business realities of succession planning. You receive big-firm sophistication with personal attention at reasonable fees. We combine legal knowledge with business acumen to create practical, effective succession strategies tailored to your specific situation.

Yes, family business succession is one of our core focuses. We understand the emotional and legal complexities of transferring a family business to the next generation in Leawood. Over 27 years, we’ve guided numerous Kansas families through this delicate process, addressing both business and personal dynamics.

We help establish clear ownership structures, create buy-sell agreements, and develop fair distribution plans that preserve family relationships. Our approach includes detailed documentation of your wishes and clear communication strategies. We find solutions that work for everyone, ensuring your family legacy continues successfully while preventing the disputes that destroy many family businesses during transitions.

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Without a succession plan, your Leawood business faces serious complications including probate delays, potential business closure, family disputes, and significant tax burdens. Kansas intestate succession laws may distribute your business contrary to your wishes. Your family could lose business control, customers might leave during the uncertainty, and employees could seek other jobs.

Your spouse or children might inherit the business but lack the knowledge or authority to run it. Partners might be forced to work with heirs they never chose. The business might need to be sold quickly at a discount to pay estate taxes. We’ve seen these scenarios devastate Kansas families’ financial security and legacy plans. Comprehensive succession planning prevents these outcomes by ensuring your business transfers smoothly to your chosen successors.

Yes, business succession plans should be reviewed and updated regularly as your circumstances change. We recommend annual reviews and modifications whenever significant events occur: business growth, ownership changes, family situations evolve, or tax law updates arise. Your business and personal situation evolve over time, and your succession plan must adapt accordingly. Flexibility is essential because what made sense five years ago may not fit your current reality. Our approach ensures your succession plan remains relevant and effective throughout your business ownership.

Essential succession planning documents include a buy-sell agreement, operating agreements or shareholder agreements, powers of attorney, wills, trusts, and possibly insurance policies. Buy-sell agreements determine what happens to ownership interests when an owner exits. Operating agreements establish management and decision-making authority. Powers of attorney authorize someone to run the business if you’re incapacitated. Wills and trusts transfer ownership at death. Life insurance provides funding for buyouts.

We create customized document packages tailored to your business structure and goals. Our J.D. and M.B.A.-educated team ensures all documents comply with Kansas regulations and federal tax law, protecting your business from legal challenges and providing clarity for all stakeholders.

A buy-sell agreement is a legally binding contract that determines what happens to business ownership if an owner dies, becomes disabled, or wants to exit. Without this agreement, your spouse might inherit your business interest but have no ability to run the company. Your partners might be forced to work with someone they never chose. Your family might get stuck owning an illiquid minority interest they can’t sell.

Buy-sell agreements prevent these disasters by establishing who can buy the departing owner’s interest, at what price, with what payment terms, and under what circumstances. We create customized buy-sell agreements that establish clear purchase prices, funding mechanisms (typically life insurance), and timelines that protect all stakeholders. Having a well-drafted buy-sell agreement gives business owners peace of mind and protects their family’s financial interests during unexpected circumstances.

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Professional business valuation by qualified appraisers provides defensible, objective value assessments. Appraisers use three approaches: income approach (discounted future cash flows), market approach (comparable company multiples), and asset approach (net asset value). They consider financial performance, growth potential, customer concentration, management depth, industry conditions, and owner dependence.

Valuations should be updated regularly because business values change constantly. Annual valuations for buy-sell agreements prevent disputes when triggering events occur. Valuations every 2 to 3 years for estate planning ensure your gifting and tax strategies remain appropriate. IRS scrutinizes valuations closely during estate and gift tax audits, so qualified independent appraisers are essential for defensible numbers.

The choice between LLC and corporation depends on your succession goals, tax situation, number of owners, and exit strategy. LLCs provide flexibility, pass-through taxation, and easier operating agreement customization for succession terms. Corporations provide structure for multiple shareholders, potential QSBS benefits (Section 1202 capital gains exclusion), and clearer succession mechanisms through stock transfers.

S corporations combine corporate structure with pass-through taxation but have ownership restrictions (no more than 100 shareholders, only individuals and certain trusts as owners). C corporations face double taxation but offer advantages for certain exit strategies and employee stock ownership plans. The right choice requires analyzing your specific situation with both legal and tax advisors to balance succession flexibility, tax efficiency, and operational needs.

We guide business owners through identifying qualified successors, whether internal candidates or external buyers, and developing succession timelines that allow adequate training and preparation. We create detailed transition plans that clarify roles, responsibilities, and decision-making authority during the handoff period. We help establish mentorship frameworks and management development strategies.

Over 27 years serving 5,407 clients, we understand that successor preparation is crucial for business continuity. Our approach ensures successors are legally and operationally prepared to lead your business. We’ve helped Kansas entrepreneurs successfully prepare the next generation to take over their companies while maintaining business value and relationships.

Business succession involves significant tax considerations including capital gains taxes, estate taxes, gift taxes, and income tax implications. Without proper planning, these taxes can consume 40% to 50% of your business value. We work closely with your accountant to develop tax-efficient succession strategies for your business.

Gary Eastman’s M.B.A. in Finance from the University of Kansas combined with his J.D. provides the dual expertise essential for complex tax planning. We structure your succession to take advantage of available deductions, deferrals, and exemptions under current Kansas and federal law. Proper planning can save hundreds of thousands of dollars while ensuring your succession plan is both legally sound and financially advantageous.

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Absolutely. We assist business owners with third-party sales, acquisitions, and mergers. Whether you’re selling to employees, competitors, or external buyers, we ensure your interests are protected through comprehensive legal documentation. Over 27 years, we’ve handled numerous third-party transitions for Kansas businesses.

We prepare purchase agreements, manage escrow arrangements, handle non-compete clauses, and ensure regulatory compliance. Our team works to maximize your sale price while protecting your reputation and business relationships. We’ve guided Kansas entrepreneurs through successful third-party sales, negotiating favorable terms and managing complex transactions professionally. Your business represents decades of work, and we ensure the sale reflects that value.

Yes, gradual transfer through annual exclusion gifts and lifetime exemption gifts minimizes taxes while maintaining control. You might gift 2% annually using annual exclusion amounts ($18,000 per recipient in 2024, $36,000 from both spouses). You might make larger gifts using your lifetime gift tax exemption ($13.61 million in 2024). You retain voting control through voting versus non-voting interests.

Gradual transfer allows children to assume responsibility progressively. It locks in lower valuations for early gifts before the business appreciates. It spreads tax consequences over multiple years. However, proper gradual transfer strategies require coordination of gift tax reporting (Form 709), annual valuation updates, and estate planning documents. This approach works best when started 10 to 20 years before full transition.

In cross-purchase agreements, individual owners buy the departing owner’s interest. In entity-purchase (redemption) agreements, the business itself buys the interest. Cross-purchase provides tax basis step-up for buyers (reducing future capital gains) but requires multiple insurance policies (each owner needs policies on all others). Entity-purchase simplifies insurance (the company buys one policy per owner) but provides no basis step-up.

Cross-purchase works well for few owners (2 to 3 people). Entity-purchase works better for many owners (4 or more people). Hybrid approaches combine both structures, giving the company first option to purchase and remaining owners second option. Your specific situation, number of owners, insurance costs, and tax circumstances determine the best structure. We analyze your situation to recommend the optimal approach.

Multiple strategies minimize estate tax on business value. Lifetime gifting transfers ownership while values are lower. Grantor retained annuity trusts (GRATs) transfer appreciation with minimal gift tax. Installment sales to intentionally defective grantor trusts freeze estate values while transferring future growth tax-free.

Valuation discounts (minority interest and lack of marketability) reduce taxable values by 40% to 60% in many cases. Life insurance in irrevocable trusts provides liquidity for remaining taxes without adding to your taxable estate. These strategies work best when implemented years before death, not during final illness. Early planning maximizes tax savings. With proper planning, we’ve helped clients save over $500,000 in estate taxes on business transfers, preserving wealth for the next generation.

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We specialize in managing complex multi-owner succession scenarios for Kansas businesses. We develop detailed buy-sell agreements that clearly define each owner’s rights, responsibilities, and exit options. Over 27 years serving the Kansas City metro area, we understand the unique challenges of coordinating multiple stakeholders’ interests.

We create transparent frameworks that prevent disputes and ensure fair valuations. Our approach includes establishing funding mechanisms (typically life insurance or installment payments), determining ownership percentages, and addressing disagreements proactively. We’ve successfully guided numerous multi-owner businesses through transitions, finding solutions that satisfy all parties while protecting business continuity and value. Clear documentation prevents the conflicts that destroy many partnerships.

ESOPs work best for established, profitable companies with strong management teams and significant value, typically $5 million or more. ESOPs provide powerful tax benefits: the company borrows money with pre-tax dollars, you can defer or eliminate capital gains tax (Section 1042 rollover), and employees gain retirement wealth through stock ownership.

However, ESOP creation and administration is complex and expensive. You need specialized legal counsel (often $100,000 or more in setup costs), ongoing third-party valuations, and significant compliance requirements. Annual administration costs range from $20,000 to $50,000. ESOPs make sense for large businesses with stable cash flows, but smaller businesses usually find other succession options (direct sale, family transfer, installment sale) more practical and cost-effective.

This common situation requires equitable treatment, not necessarily equal treatment. One child gets the business because they want to run it and have the ability. Other children receive equivalent value in life insurance proceeds, investment accounts, or real estate. Your estate plan documents specify who gets what and why.

Family meetings explain your reasoning while you’re alive to prevent misunderstandings after your death. Sometimes you transfer voting interests to active children but economic interests equally to all children. Sometimes you sell the business and divide proceeds equally. The key is intentional planning addressing everyone’s interests fairly. We’ve helped numerous Kansas families navigate this sensitive situation successfully, preserving both business value and family relationships.

Without disability planning, your business faces operational paralysis during long-term incapacity. Buy-sell agreements should define disability clearly (typically inability to perform duties for 6 to 12 consecutive months) and establish buyout procedures. Disability insurance with buyout riders funds business interest purchases.

Powers of attorney with specific business management provisions authorize agents to operate the business on your behalf. Operating agreements and shareholder agreements should authorize temporary management transitions during short-term disability. Your succession plan must address both permanent disability (triggering buyout under the buy-sell agreement) and temporary disability (authorizing interim management without ownership changes). Kansas businesses need both documents to ensure continuity during any period of incapacity.

Family business succession requires addressing both business continuity and family harmony. Start with honest assessment: who has ability and desire to run the business? Create clear roles and responsibilities for each family member involved. Establish decision-making processes preventing deadlock (supermajority votes, buy-sell provisions, arbitration clauses).

Use voting and non-voting interests to separate control from economic benefits. Document your succession intentions explaining your reasoning. Hold family meetings addressing concerns and expectations while you’re alive. Consider family employment agreements establishing performance standards and compensation. Use trusts or holding entities providing structure and preventing ownership fragmentation.

Family business succession planning is as much about communication and relationships as legal documents. We’ve helped numerous Kansas families navigate these sensitive conversations and create structures that preserve both business success and family relationships.