You’ve spent years turning your business into a reliable way to provide for your family. How do you make sure they’re still taken care of once you’re gone?
Estate planning is one of the most important parts of making sure your family is taken care of when you are no longer at the helm. But most small businesses don’t have a plan in place for a transition to the next generation, and it could cost them dearly. Make sure you have a solid course of action to ensure your family isn’t left wanting.
The first step is talking with your family. Let them know what your plan is for the business and listen when they tell you their ideas. The most capable heir might not be the most willing, or someone might have hidden aspirations. From here, you can use wants and abilities to decide who will take on what roles.
Once you have a layout for succession, there are few more steps to help ease the transition:
- Begin training: Make sure everyone who is going to have a role going forward knows how to do everything required of them.
- Separate assets: Forming a corporation will separate the business from your personal assets. This will make the transition easier when the time comes.
- Tax strategy: Develop a plan for the business that will handle taxes, transfers and trusts to make sure you take care of everyone.
Maybe keeping your family involved isn’t in anyone’s best interests. There are other options, like leaving the business to a trusted partner or employee, while giving your children shares instead of positions. Selling the company outright is another option, which can still contribute to the family inheritance.
Having a plan in place will answer questions before they arise and avoid any difficulties that could otherwise steer results away from your wishes. Plan for success and leave your family with peace of mind.