You’ve worked hard to create your family business, and you want your legacy to last. That means thinking ahead and actively participating in succession planning.
Preparing your heirs for their future roles in your company can be the best way to secure your family’s financial stability for generations to come – but only if you go about the process carefully. The following are some tips worth keeping in mind.
Get started early
Succession planning is not something that should be left until a crisis is looming. The sooner you begin discussing your goals for the business with your family, the sooner you can identify which family members are interested in taking on management roles and develop their skills to ensure continued success. Note that it’s unwise to assume your children will naturally want the business, so present the idea as an opportunity, rather than an obligation.)
Establish clear goals
Clearly, you want the business to thrive well into the future. But how do you envision the business supporting your extended family? What role will “passive” participants in the family business actually have? What option will they have to withdraw their interests? You need to consider the objectives you have, the potential areas for disputes among those who inherit what you’ve built, and a dispute resolution method that won’t unnecessarily disrupt operations.
Document your plan
Finally, you need to seek legal guidance so that you can properly address the issues of inheritance and taxation in your will.
Thoughtful approaches to planning can help you minimize taxes and prevent delays when it comes time to transfer the business. These efforts alone can help your business endure after your passing.