Estate planning is one area of the law that most people in Washington know a bit about, even if it is just from looking into getting started on this process. For those who actually have an estate plan in place, congratulations. You, unlike millions of Americans, have a plan in place for passing on your assets, addressing tax issues and stating your wishes. However, if you own a business, do you need to do more? That is what one recent news article pointed out – saying that “succession” planning goes above and beyond simple estate planning.
Making a succession plan
So, what is different about a succession plan as opposed to an estate plan? Well, let’s face it – it can take years, if not decades, for business owners to build their companies and plan out business models that put the company on a path toward success and profitability. Do you want to put that all at risk? Most likely, the answer is “no.”
As the recent news article pointed out, in a succession plan a business owner wants to make sure that the company is put in capable hands as the decision-making process is handed off to the next generation. This can be complicated, involving quite a bit of communication, perhaps with family, friends and co-workers. And, eventually, a decision needs to be made – who will be the best person or management group to ensure the future success of the company you built?
A succession plan for a business is just one component of an estate plan for business owners. But, it is a crucial one, as it most likely deals with a significant and favored asset. Be sure to get the right information about your own succession plan needs.