Whether a family business is big or small, succession planning is important to avoid family feuding or damage to the business. Here are some tips for avoiding mistakes in succession planning.
Will your business live on after you pass away? Many family businesses begin life as the dream of a driven founder who guides the business to success. However, after that founder passes away, the businesses often flounder in the hands of the next generation.
While this is not always avoidable, it can be made less likely by avoiding common mistakes in succession planning.
Recently, the Wills, Trusts & Estates Prof Blog published a list about how to avoid those mistakes in an article titled "Succession Plan Considerations."
The list includes:
- Start succession planning sooner rather than later.
- Bring in outside advisors to help determine who is the best person to manage the company after the founder passes away.
- Get an appraisal to have an accurate assessment of the value of the business.
- Make the plan and open dialogue with possible successors and family members.
- Do not forget to plan for the estate tax to make sure key parts of the business do not need to be sold off.
If you have questions about how to properly plan for your business after you pass away, consult with an estate planning attorney about how to make succession planning part of your estate plan.