The Benefits of a Business Succession Plan
When most people think about planning for death, they envision personal estate planning. But even if you are already proactive in that area, you may not be finished if you own a business.
Succession planning for business owners is at least as important as personal estate planning, maybe even more so because you have a whole other family to consider – your team and your clients. Plus, the success of your business in the event of your death may be an integral part of the well-being of your family, after you are gone, or if you are no longer able to work.
In either case, when you pass away, you lose the ability to influence what happens with assets and liabilities. If you own a business, potential troubles are doubled, if not tripled.
Planning for your death is not something to be avoided, in fact more and more we are coming to understand that planning for death makes life better now.
Fortunately, a Creative Business Lawyer or Family Business Lawyer can help you structure your business holdings and agreements to not only avoid problems after you’re gone, but make your business even better during your lifetime.
Some of the things we will review when looking at a business succession plan:
- the operating agreements or bylaws of your company to ensure there’s a clear plan for the event of your death,
- buy-sell provisions you may have to provide for the buy-out of your family if you are in partnership (because it’s likely your partner doesn’t want to be in business with your family and you want your family to have the liquid money from the value of your business to support them),
- value of your business and how to increase the value, even if you are not available to support the day to day.
Looking at each of these things now, while you are healthy, can increase the value of your business today and make it possible for your business to continue beyond your life as well.
If you are an owner in a small business or a family-owned business, it is even more important that you engage in business succession planning. People close to you, including your family, are likely to struggle with their emotions when you’re gone. You can help ease the burden on them by proactively addressing the transition of your business interests at death.
This article is a service of Kundani Chang Khinda Wilson LLP. One of our primary services is to assist not only with estate planning but to advise business owners in making the right legal and financial decisions so that they save money in the long-run and avoid the unnecessary costs of litigation. We advise our business clients on a whole host of issues, including guiding them through the right choice of business entity, location of business entity, start up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems that you need to start your next business and succeed right out of the gate. Many of our business clients are on our membership program, where they save money for monthly legal counsel consultations. Call us today to schedule a time to get started!