When you’ve worked for years to build your business, it’d be difficult to imagine it ceasing once you retire or pass away. That’s why many business owners consider leaving their businesses to their families, namely their children. A successful business can provide an abundance of financial security for your loved ones. However, since proper estate planning is so important for business owners, it’s best to establish a succession plan for your business. But before you do so, ask yourself a few very valuable questions.
1. Does your family actually want the business?
It may seem like an obvious question, but many business owners fail to consider whether their families actually want the business. While you may feel very strongly about leaving your business to them, do they care about running it? If not, maybe someone else should be considered. You could also plan to have the business sold and the proceeds from it split evenly among your heirs.
2. Do you have more than one child?
Although it would certainly be easier on paper, it’s unlikely that you would split up ownership and business roles evenly. Therefore if you have more than one child it’s imperative that you set up a plan for what each child’s job is to be. Without a clear plan you could end up creating animosity among your kids – and a failing business.
3. Does your family understand the business?
Sure they may know what you do for a living, but do your children truly understand what’s necessary to run your particular business? You must ask yourself whether they have the necessary skills to run it. If they already do then you don’t have to worry about it, but if not, it’s best to get working with them and showing them the ropes while you’re still in the thick of it.
4. Do you care to remain involved?
While it’s standard for your succession plan to include what will happen to the business if you should pass away, it’s also important to consider whether you want to continue your involvement with the company even after you technically retire.
While these questions may seem simple on their face, they can actually prove quite complicated. That’s why it’s best to consider the answers to them as soon as possible. The sooner you can start planning, the better chance that your heirs will be able to successfully run the business.
Heritage Legal, PC Helps Those in California to Plan for the Future of their Businesses
An estate planning attorney can listen to your wishes, provide legal advice, and assist you in the development of a business succession plan that works best for you and your loved ones.
At Heritage Legal, PC, we understand the importance of protecting your interests and the interests of those whom you care about most. We can help you to create a business succession plan that fills all of your needs and plans ahead for your business. To learn more or to schedule a free consultation, contact us today!