When the time comes when you are sadly no longer around, you may want your loved ones to remember you by the keepsakes and heirlooms you leave behind for them to relic. But if you are also a business owner, you may think of no greater way to let your legacy live on than to transfer these rights and assets to your loved ones. Well, this may require a special means of planning within your estate plan. Namely, this is otherwise known as business succession planning. Read on to discover how to handle business succession planning and how a seasoned Putnam County estate planning attorney at the Law Office of Andres D. Gil, PLLC can work to ensure your legacy lives on through your business.

What should I know about business succession planning as part of my estate plan?

As the name suggests, business succession planning entails establishing what will become of your business when you, unfortunately, pass away and cannot own or manage it yourself. For this, you may have to choose between internal and external succession planning.

On the one hand, internal succession planning is if you want to transfer business ownership and other leadership positions to one or more of your existing employees. This may appeal to you if you wish your business operations to be handled by a trusted inner circle that is already familiar with what it involves. And if you are the owner of a family business, this succession may perfectly fall to your surviving spouse, children, grandchildren, or other family members. On that note, if your surviving children are still too young to inherit this responsibility at the time of your death, you may lay out a mentoring or gradual ownership transfer within your plan.

On the other hand, external succession planning means that you will be selling your business to a third party, whether it is a strategic buyer, private equity firm, or competitor. This may be the better option if you believe your business’s internal structure is not secure enough to move around employees to ownership and other leadership positions drastically. Or, if the required education, experience, and skills to take on these positions cannot be found in any of your existing employees. Overall, this may guarantee the smooth transition of your business at the time of your death, and solidify its success and thereby your existing employees’ job security.

What other estate plans should I make for my business?

Simply put, you must incorporate your business assets and interests throughout your personal estate planning documents. Examples of this are as follows:

  • You should name designated beneficiaries of your business assets in your will.
  • You should fund your revocable living trusts with your business assets.
  • You should appoint financial powers of attorney for your business assets.
  • You should appoint legal powers of attorney for your business interests.
  • You should include coverage of your business within your life insurance plan.

For more information on if and when to start drafting your business estate plan, please don’t hesitate to contact a competent Putnam County estate planning attorney from the Law Offices of Andres D. Gil, PLLC. We look forward to hearing from you and later on helping you.