Although thinking about your own mortality can be a difficult and stressful topic, if you are a business owner, it is a smart business decision. If you die without having considered what will become of your business upon your death, then all your hard work building your business could be lost and squandered without your control.

The importance of advance planning for business succession cannot be overstated. It is something that a qualified estate planning attorney can assist you with, and it can be one of the most strategic and valuable investments you make in the future health of your business.

What is business succession planning?

Business succession planning is essentially a legal plan you set in place to handle the administration of your business upon your death. Without this type of planning, especially if your business is family-owned and -operated, your loved ones may face an even more stressful time as they are mourning. In addition, planning for your business succession well in advance of your later years ensures that your decisions and wishes regarding the business are respected even in the event of an untimely death.

Statistics show that only a third of family businesses make the transition to the second generation. Business succession planning can ensure that your business is in that one-third and can continue successfully well into the future.

How do I plan for my business succession?

The primary decision you need to make when planning for business succession is who you want to have take over the business after your death, or prior to your death if you become incapacitated and are no longer able to run the business. Often, this means establishing a trust to ensure that the business is successfully transferred and that other administrative and financial issues, such as inheritance rights, are also taken into consideration. 

Because business succession planning can be complex and requires a series of legal documents to ensure that it is properly handled, it is best to consult with an estate planning attorney. The right attorney can help you consider your current and future options and guide you in creating a strategy that meets your needs and wishes.