Whether you are just starting your own company, or are a seasoned entrepreneur, a business succession strategy is an integral part of your estate plan. Many people understand the significance of a comprehensive estate plan. However, they fail to acknowledge the importance of a sound business succession plan.
A knowledgeable, board certified estate planning lawyer can review the size of your estate, your assets, and your business holdings to determine the best legal strategy. With the right legal help, you can ensure business transitions are smooth, and pitfalls are avoided.
Continuing the business after death
Have you thought about what will happen to your business after your death? Will it thrive under your brother-in-law’s rule? Or will the windows be shuttered shortly after your memorial?
If you are the sole owner of your business, your company can live on after your death as long as you take the time to plan ahead. First, consult with an experienced, board certified lawyer. He or she can determine the best way to preserve your business and its assets. While you can certainly leave your last wishes in your will, a business power of attorney, corporate document, or trust may be more appropriate. Ultimately, you want a plan that is secure to prevent in-fighting and a bumpy business transition.
Choosing a successor
First and foremost, do not assume what role your family, friends or employees may want in the continuation of your business. Carefully identify the candidates who will ensure a successful succession. Examine their skills and temperament. Do they have what it takes? Or will they be overwhelmed, hit the panic button, and run away while your business implodes?
Here are a few more tips on how to narrow down your list of potential succession candidates:
- Give everyone a fair shake — If you have multiple candidates, give each one a fair chance to prove they have the skills necessary to succeed.
- Be clear with your decision — Being vague will only lead to problems after your death. Make a decision, communicate it clearly, and stand by it. Let all interested parties know who your successor will be.
- Work closely with your successor — Once you have decided on a successor, work closely with him or her, explain the daily duties, and keep an open and constant line of communication about the business and what is expected of them.
Special tax considerations
Before selling all or a portion of your company stock to your children, consult with an experienced estate planning and tax lawyer first. Remember, your business may continue to grow during your lifetime. A knowledgeable attorney can explain how to avoid negative tax consequences by making lifetime gifts or creating a trust.
Experienced legal team helps you create a sound business succession plan
The Law Offices of Hoyt & Bryan is committed to helping Florida residents and business owners create sound estate plans throughout Central Florida. For more information about business succession plans in Central Florida call (407) 977-8080 today, or contact us online to speak with an experienced and board certified estate planning attorney.