After building your family business, you want to take steps to protect it. One essential step to protect your business for the next generation is to address the business in your estate plan.
Prepare for the sale of your business if you intend to sell it
If your loved ones will not continue the business, you want to create the foundation for the sale of your business after you pass away. Consider specifying in your estate plan that you want the business to be sold and the proceeds divided among your beneficiaries. You may also want to establish the value of your business, collect the documents necessary for the company’s sale, and consider creating a buy-sell agreement if your business is a partnership.
If someone will take over the family business, have a succession plan in place
You may fully understand what it takes to run your business, but your successor may need additional guidance when they take up that leadership role. Not only does a succession plan establish who will take over your business, it can also establish a detailed plan for training, delegating responsibility for owning and managing the enterprise, and other essential details.
Plan for what will happen if you cannot run the business yourself
Illness or injury may take you away from your business earlier than expected, and your business’s success may depend on your estate plan. Consider powers of attorney that allow your representative to make legal or financial decisions on your behalf. You may also want to consider placing your business in trust so that your successor can keep your business operating even if your health prevents you from making leadership decisions yourself.
With careful planning, you can ensure the continued success of your business even after you pass it to your successor.