Plenty of owners with decades of service in their business have simply closed up their company and walked into retirement. However, small businesses could be eligible to transfer on the company to key employees or even to future generations through the process of succession planning.
Closing up the business doesn’t have to be the only option presented to you and your loved ones if you have been running a business for most of your life. Succession planning should be part of the estate plan for every business owner and especially those companies in which the heirs have an established stake.
Many families simply refuse to address planning for end of life issues, assuming that they’ll have time in the future to think about these concerns. However, a business could easily end up in the hands of children who are not equipped to take it over or who might find that their ownership interest does not align with the needs of the company in light of the owner’s incapacitation or sudden passing.
Every small business should have a succession plan in place. This enables the decedent’s heirs to dispose of the business as quickly as possible while keeping the most valuable employees or it can outline how to pass the ownership of the business. Overlooking these concerns can make it difficult or nearly impossible for family members to make these important decisions when the time comes.
