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What Goes into a Successful Succession Plan
What Goes into a Successful Succession Plan
If you have your own business, you may wish to keep the business within your family or sell it, before or after you pass away. Regardless of which option you choose, careful planning will ensure the business can stay up and running. It is critical to establish new owners and identify key individuals who can assume executive and managerial duties, including family members. The overarching goal is to choose the most capable individuals to run the business. A well thought out succession plan will clarify how ownership will be transferred, establish rules for hiring, compensating and promoting family members, and specify how disputes will be resolved.
A few ownership transfer considerations should include:
Coordination between who will own the business and who will manage the business.Consideration of the best interests of the business and the owner's family.
A few management succession considerations include:
Development, training, and support of successors.Delegation of responsibility and authority to successors.Maximizing retention of key employees through equitable compensation planning for management, family/non-family employees, and active/inactive shareholders.
At McDonald Law Group, we understand that for many American families, their small business is their livelihood. Our goal is to ensure the proper protections are secured through a concise succession plan so you and your family don't have to worry about how to proceed with the business after the death of the owner and/or family member.
This article was provided for informational purposes only and does not constitute legal advice or establish an attorney-client relationship.
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To start the New Year off right, you'll want to make sure you have all these items checked off your list. If you don't have this list completely checked off call our office today to set up a consultation to discuss your options. 1. A Will. In a Will, you state who you want to inherit or distribute your property and name a guardian to care for your young children should something happen to you or your spouse. 2. A Trust. A living trust is a trust that is created during your lifetime. In other words, while you are still alive, you transfer title to your property from your name to that of the trust. There are different types of trusts that can be done depending on your needs. You should discuss with your attorney what assets you want protected so they can advise you on the trust that best suits your needs. 3. Power of Attorneys. With a durable power of attorney, you can give a trusted person authority to handle your finances and property or medical decisions if you become incapacitated and unable to handle your own affairs. 4. Beneficiaries. Naming a beneficiary for bank accounts and retirement plans makes the account automatically "payable on death" to your beneficiary and allows the funds to skip the probate process. 5. Storing your documents. It is a good idea to compile the necessary documentation and make your executor or successor trustee aware of its location. They may need access to the following documents:
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