We are fond of saying that everyone - no matter their age, health or wealth - should consider the benefits of developing a comprehensive estate plan. In addition, business owners should take the time to decide on a succession plan in the event of their untimely death or incapacitation.
On the surface, many organizations refer to a succession plan as a living document that contains insight into possible promotions and transfers that might become necessary to fill management holes as people retire or seek other employment opportunities. Used in conjunction with an estate plan, however, succession planning becomes an authoritative process that allows business owners the opportunity to clearly state their wishes regarding the organization's power structure following the death of the owner.
Creating an effective, comprehensive succession plan can quickly become a complex, frustrating process. There are numerous factors to consider during the estate planning process, such as special tax considerations. While an estate plan is a finite document, your business might continue to grow and expand in the years and decades after the document is completed. It might be wise to seek the counsel of an experienced attorney who can help you plan for contingencies including the increasing value of your business.
Additionally, there are options to explore that might help your heirs avoid complications during the probate process. Developing a Family Limited Partnership or a Family Limited Liability Company, for example, can help clarify your after-death wishes while providing a financial benefit to your estate by potentially removing some of the limited partnership units from the taxable estate.
When you are considering estate planning or business succession planning, discuss your options with a knowledgeable attorney. A lawyer can answer your questions while helping you avoid unnecessary legal delays.