Your Business Succession Planning Checklist
As a business owner, you have a lot to think about on a daily basis. It is important, though, that you do not overlook the importance of business succession planning. With a succession plan, you can make any transfer of the business smooth and seamless if you ever intend to leave it. If you do not create a business succession plan, your loved ones and business partners will not have any guidance if you pass away, decide to retire, or have an emergency. Below, our Dade City estate planning lawyer provides a checklist that can make business succession planning easier.
Have Multiple Conversations Regarding the Future of the Business
You will need to have multiple conversations regarding the future of the business. You should speak with your family members, co-owners and business partners, and key employees. Speak to each of these people about who will take over for you when the time comes. After having these conversations you can determine who wants to step in and who has the necessary skills to do it.
Determine Who Will Own the Business in the Future
After having the important conversations about who will take over your business, you then need to make the final decision. You will then need to speak to the chosen person, confirm that they are committed to running the business, and ensure they understand what is expected of them.
Create a Written Business Succession Plan
When creating a business succession plan, over-planning is always better than not planning enough. Within the plan, outline any scenario that could arise including your possible death, illness, retirement, sabbatical time, vacation, and emergency. Also include any resources or training the new owner should have, which could include the following:
- Training and education
- Access to systems within the business
- Financial resources
Purchase Life Insurance
It is important to purchase life insurance so you can make sure your family is taken care of in the event that you pass away. A life insurance policy also acts as an important part of your business succession plan. Life insurance policies can include death benefits that can buy out your shares of the business. This allows them to be distributed among the other business partners, without interruption to the business.
Draft a Revocable Living Trust
Revocable living trusts are invaluable to your loved ones after you pass away. During your lifetime, you can place assets into the trust, including your interest in the business. After you pass away, the business will not have to go through the probate process, which can also make it easier to operate and not interrupt the business.
Contact an Estate Planning Lawyer in Dade City
Business succession planning can be challenging and there are many factors to consider. At The Law Office of Laurie R. Chane, our Dade City estate planning lawyer can make sure your plan has the necessary inclusions and will protect you, your family, and your business partners. Call us now at 352-567-0055 to request a consultation and to learn more about how we can help.