Planning for what happens to a family business after you are gone is a difficult process that many folks leave up to chance. This article explains what happened to a gentleman when he was faced with taking over his father’s business after his father died reminded me of a client I have been working with in a very similar situation.
For many of our clients, a family business is their biggest asset. While they all want to make sure that the real estate, bank accounts and retirement accounts are properly taken care of after they die, they often can’t be persuaded to take action to create a business succession plan.
I recently worked with a client on a plan for transitioning the business to the kids, but when it came time to discuss the plan with the children and have some difficult conversations about who was capable of running things after dad died, he was unwilling to do so. As a result of his reluctance to have the discussions, he put off the planning for the business. The other pieces of his estate plan were dutifully addressed, but he decided to delay taking action to secure the transition of the business. Unfortunately, he died before he was able to get back to planning for the business succession and left a mess for his family to resolve.
Planning for how your family business will transition after your death is just as important as deciding who will get the house. If you don’t put plans in place to address the transition of the business, more likely than not, your family will wind up having a dispute that in the end could eat up any inheritance that you would have left to them. If you own a small business and you have not planned for what will happen to your business when you die, call a qualified business planning attorney today. You need to plan for who will take over, how they will take over and how you can leave them with enough cash to address any liquidity issues left by your departure.