Who, what, when: Have you begun business succession planning?

Throughout your career as a business owner, you undoubtedly enjoyed seeing your company thrive and grow into the success you had always hoped. You likely put much of your life into the business in order to ensure its survival, and as you grow older, you may find yourself wondering what could happen to the life of your business when your life comes to an end.

Luckily, you can incorporate business succession plans into your estate plans in order to address your hopes, needs and desires for your company. Because you may need to leave instructions for a variety of areas related to the succession, you may want to ask yourself certain questions.

Who gets the business?

If you have children and any of them have had a hand in running the company or have shown interest in taking over one day, you may desire to leave the company to your children. However, if your children do not have any interest in your business becoming the family business, you may need to determine whether your company should close its doors after your demise or whether another party should take over.

If your company has co-owners, you may simply wish to leave the business to those co-owners. However, you need to address these sentiments in your succession plan. If you do not, the possibility exists that your portion of the company could pass on to your children or other heirs who had no desire for it. A buy-sell agreement could easily avoid such an outcome.

What should you include in a plan?

Because the transfer of any position of power in a business can have complications, you may wish to include transfer details in your succession plan, such as training and support for your successors. Additionally, your company may benefit from your making clear who will own the business, who will manage it and how those parties should work together. Essentially, your plan should include anything you feel necessary to ensure that your business continues operating as smoothly as possible.

When should you create a succession plan?

If you wish to ensure that your legacy lives on in the hands of trusted individuals, you may want to create your business succession plan as soon as possible. You never know when an incapacitating or fatal event could occur, and having this plan in place could prevent confusion and complications in the future. In order to ensure that you plan correctly and that your plan covers the necessary areas, you may wish to consult with an experienced North Carolina attorney.