Succession planning where company ownership is concerned can be fairly complicated, but at a simple level every plan is based on two basic issues. You’ve probably thought a lot about who will take over for you; that’s one. But, just as importantly, how can you make sure what you want to happen will happen? Without the right short- and long-term plans in place, it won’t.
By Stephen K Lehnardt
Business succession planning focuses on two main concerns. On the one hand, planning for what happens way down the line in the future when you're ready to give up the business—the “succession” plan. And, on the other hand, planning for what will happen to the family business if you pass away tonight—the “continuation” 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.
For more information in Liberty, MO and the Kansas City Area about effective business succession planning and to access free information and tools to organize your estate, visit our elder law and estate planning website.
Reference: Forbes (June 11, 2014) “Don't Let Your Family Business Die With You”