In the hectic day-to-day routine involved with making sure your business is profitable, some important things can fall through the cracks. For many business owners, long-term planning for protecting their business and passing it to the next generation is one of these important items. While “planning” means different things to different entrepreneurs, this blog will provide a few general tips on long-term planning that is relevant to all business owners.
The statistics on business owners passing ownership to the next generation show that around one-third of companies actually survive this “passing-of-the-torch.” To be one of those companies in the minority, you need to plan effectively AND early. In fact, it is worthwhile to consider how you want to exit your business when you are just starting out and filing startup documents. Choose an ownership structure that makes it easy for you to transfer your ownership interests to your successor.
After that, spend plenty of time choosing and training your successor. If you have a family business, your vision might be to have your son or daughter eventually take the reins. Unfortunately, this might not be their wish; this can sting, but choosing and grooming an outside hire can also be fulfilling.
As a business owner, you will never forget the long days and sleepless nights spent to get your company off the ground and thriving. You deserve to have your labor of love passed down to your loved ones without worrying about a lawsuit wiping its value away. A trust has many benefits; one of these benefits is protecting your business and its assets from your heirs' creditors. It can also help your heirs avoid estate taxes.
The vast majority of estate planners need a Last Will and testament, and entrepreneurs are no different. In addition to designating guardians for your minor children, a Will distributes assets—including privately-held businesses—to beneficiaries.
Another important estate planning document for business owners to have is a durable power of attorney. This gives an agent (a trusted family member or friend, for example) to handle certain financial matters on behalf of the principal; it can also give agents the ability to access financial information and accounts related to your business. Powers of attorney became vital when business owners become incapacitated (unable to make or communicate decisions).
Any business owner knows that planning for the long-term future is crucial, but so many never seem to get around to it. Our firm understands how truly busy you are; as a result, estate planning sometimes takes a back seat. We are here to make the process simple and easy for you so you can concentrate so you can protect what matters most. Give us a call at 281-747-1326 to discuss your options today.