You’ve worked hard to build up your company, and you hope that it can support future generations of your family. It’s imperative that you take the time to get a succession plan together so that it’s in place and ready to go if something happens to you.
One thing that you have to remember as you do this is that the structure of your business matters. If it’s a sole proprietorship, there’s not a distinguishing line between the company’s assets and your own assets. This means that you should be able to include the company’s assets within your own estate plan.
What if your company isn’t a sole proprietorship?
If your business has a structure other than a sole proprietorship, you need to look at how you can set up the succession plan. The goals of the plan are to continue to provide for your family, reduce the tax liability and minimize the downtime of the business during the transition period.
Being able to set up a plan and put it in writing is a good start. You should also ensure that the people who are part of the succession plan are trained so they know exactly what they need to do.
One of the best things you can do is to ensure that you have an estate plan that outlines the plans for your personal assets, as well as a succession plan for the business that outlines what needs to happen with it if you pass away. Because these can be intertwined, it’s often best to have someone familiar with both of these to work on the case so they can get everything in order as easily as possible. Just remember to get started right away so that your plan is ready when it’s needed.