Part of running a successful family business is planning for its future. Whether you’re the third generation to take over operations or you started the business from the ground up, with nothing but $100 in the bank, it’s important to make sure the future is bright for your business and won’t be squandered due to lack of funding, managerial issues, or family infighting.
From a personal standpoint, it’s important to prepare your future business beneficiaries. This may mean allowing your children to work alongside you on weekends and during the summer months. Another important step to consider is knowing when to walk away. This may mean taking an early retirement to enjoy leisure and travel with your spouse or it may mean putting in a few extra years if the business is struggling or your successors aren’t quite ready to do a full takeover. Whatever your situation may be, transitioning out smoothly can save everyone time, money and energy.
One of the ways you can provide for the future succession of your business is by legally naming the beneficiary in your Will. You will want to be specific, for instance, if you are leaving your family business to two out of your three children, that you name those two children specifically. You may want to include instructions on how revenue is to be split or how managerial duties are to be split. Consulting with a trust attorney and/or business advisor can be incredibly helpful while drafting your Will when it involves business succession.
Another option to consider in business succession is forming a partnership. By teaming up with the individuals you intend on leaving your business to, you can ease them into the roles they are looking to take on. Finally, you may consider gifting your business interests over to your beneficiaries. By making lifetime gifts (not exceeding the allowable amount per year), you can save a substantial amount on potential tax bills.
If you or someone you know has a business that needs legacy planning, contact our office today to speak to a licensed attorney. (251) 621-1555