When determining what happens to your assets, business, estate, and finances after you pass away or retire, many people think that creating a will can cover everything they are concerned about. However, a will only has so much power. If you are concerned about what will happen to your business and your estate after you retire or pass away, it is imperative that you discuss your options with an attorney to come up with the best options for you. The two mains options that you will likely work on are your business succession plan and your estate plan. Having two distinct plans for your business and your estate can set you up for a comfortable retirement and ensure that the details of your plans are dealt with in a way that you pre-determined. For more information, read on about the difference between developing a business succession plan and an estate plan.
What Is a Business Succession Plan?
When you develop a business succession plan, you are identifying ways that your business can successfully carry on after you have passed away or retire. In doing so, you want to know how the business can be successful. You can assess internal candidates you believe would be a good fit for keeping up your business, or determine if there are family members you would entrust to do so. You want to make sure that who you put in charge has a vision for this business that aligns with yours. On the other hand, you might choose to sell your business to provide safety and security for your family. Choosing which option is right for you and your business is vital when establishing your plan.
If you do not have a business succession plan, your business will not have a clear direction especially if a leader has not been named. It can also create an environment of distrust and disloyalty if employees feel that their job security is at risk.
What Is an Estate Plan?
Many people hear “estate planning” and believe that this is only for the richest of the rich. However, almost everyone has estate of some kind. Estate can be
- Your Home
- Other Real Estate Properties
- Your Car
- The Money in Your Bank Accounts
- Possessions, and
When you plan for your estate, you are deciding who you want to receive which items after you die. Perhaps you want your spouse to get your home, your daughter to get your car, and your immediate family to get what is in your checking and savings accounts. Planning your estate can ensure your family members get what they need after you pass away or are disabled, and it can even name a guardian if you have minor children.
Without an estate plan, your family could pay high probate court costs, family disputes can arise, and it might delay when your estate is delivered to your family.
What Can I Do?
Clearly, estate planning and business succession planning are two entirely different things. However, being prepared on both accounts can save you and your family a great deal of stress and heartache. If you need help navigating these topics, speak with a business lawyer Danbury, CT trusts today who can help with your future planning.
Thank you to our friends and contributors at Sweeney Legal for their insight into business succession and estate planning.