If you own a family business, then planning what will happen to that business after you pass away is an important part of planning for your estate. Fortunately, with careful planning it does not have to be a difficult process.
Many family businesses have failed because the founder did not properly plan for what would happen to the business after the founder passed away. If you want your business to outlast you, then succession planning is vital. If not done properly, your heirs will not know what to do and the odds that the business will fail are very high.
Recently, the Wills, Trusts & Estates Prof Blog published some tips on succession planning in an article titled "Three Tips on Succession Planning."
The tips include:
- Keep compensation for being a part of the business and any inheritance separate, making sure younger family members are invested in the business.
- Train younger family members how to run the business and teach them about financial responsibility at the same time.
- Communicate your succession plan clearly, but keep it flexible enough so it can change when circumstances change.
If you have questions about making a succession plan part of your estate planning process, talk to an experienced estate planning attorney about it.
Reference: Wills, Trusts & Estates Prof Blog (January 22, 2015) "Three Tips on Succession Planning."