Where family businesses are concerned, succession planning receives a deserved amount of focus – but that focus tends to be on deciding who will take over and ensuring they are ready. But if you own a business, what happens if you pass away or are incapacitated due to illness or injury?
There are really two situations you have to plan for when it comes to the future of the business. On the one hand: What will happen way down the line when I’m ready to give up the business (to sell it or to set up a successor, whichever I decide)? And, on the other hand, there is the more immediate question: What will happen to the family business if I pass away tonight? These are entirely different questions, and likely there are entirely different answers. So how do you plan?
What is needed is a tiered approach as explored in a recent Forbes article titled “Don't Let Your Family Business Die With You.” This may require both short-term plans and long-term plans.
Essentially, these are the same kinds of thoughts and approaches you should begin with in all aspects of your life, property and estate. However, there is a special difficulty when it comes to a business. Proper planning has, at all times, one foot in the future and one foot in the present because you never know when the unthinkable could happen.
Do you have a plan in place? If you do, does it take everything into consideration? If you don't, now is the time to start putting the pieces into place. Even if you have not yet gotten your thoughts together for a long-term plan, you absolutely must have the short-term plan safely in place.
You can learn more about this topic as well as other strategies on our website under the tab entitled: business planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Forbes (June 11, 2014) “Don't Let Your Family Business Die With You”