If you’re like a lot of small business owners, it’s probably easy for you to get caught up in taking care of the day-to-day operations, and put off thoughts of what would happen to your business if you passed away. Yet, if you want your business to thrive even after you’re gone, it’s essential that you have a plan for how that will happen. So, where do you start?
The first, and maybe the most difficult step, is to decide who will take over for you when you retire or pass away. Especially if you have more than one child, this can be a touchy subject. Yet, having a plan for who will take over is the only way to ensure a smooth transition. The most important aspect of choosing your successor? Making sure he or she can do the job. As tough as it may be, you need to take an objective look at your children (or other relatives) and decide who is the most capable of filling your shoes and taking your business in the direction you want it to go. And don’t forget to make sure your successor is willing to take over for you.
Once you’ve crossed this hurdle, you will want to make sure that whomever is taking over has all the training and preparation he or she will need. This could mean providing the appropriate education or outside training, or it could mean on-the-job training. Whatever you do, make sure your successor knows the business inside-out before he or she has to take the reins.
Finally, make sure estate taxes don’t decimate the value of your business. This is where your estate planning attorney can help you. There’s a wide variety of tax planning strategies available – everything from the family limited partnership to a variety of trusts – to help keep your business in the family and make sure it retains its value.