By Evan Vitale
In case of an accident; health issue or (Heaven forbid!) your untimely death, what will happen to your business? Your employees? Your estate?
This is why you should consider succession planning as part of your overall estate plan with your financial advisor and attorney/lawyer. In a nutshell, succession planning is the process by which the responsibilities of running your business is handed over to someone else when you are no longer able (or willing) to operate it.
Here are some considerations:
- This is the first step in thinking about when you would like to hand over the business. Here is when you create a rough estimate of when you’d like to start delegating authority to another person (or persons). That way, the process is complete by the time you wish to retire. If you have a timeline in place, you’ll be able to work toward a date and have enough time to train your successor(s).
- Equally as important as the timeline, you will need to give good consideration in choosing an appropriate individual or group to run your business. Here, it is important to have more than one candidate in mind just in case your top choice decides to leave the business or if he/she doesn’t want to take over your position and responsibilities. Ideally, the one you choose should have similar views to your own about how to run the company, etc.
- Don’t wait until retirement date (or your death) in handing over the reins of your business. Consult with your attorney and financial advisor in regards to estate and gift tax issues within your state. A smooth transition will make it easier on everyone – especially you.
If you haven’t created a will or haven’t considered succession planning, now is the best time to discuss this with your estate planning attorney (or law firm) and with your financial planner. Get going on this until it’s too late!