Plan well and your business will survive
Regardless of whether you want to pass your business to your family or sell it to a third party, a thorough plan is vital to the survival of the company after you’re gone. A recent article in the Investors Business Daily outlines some of the various challenges your family may face with the business if you die or are incapacitated. These challenges can include, among other things, ensuring sufficient cash flow, the ability for family members to get money out of the company, maintaining existing employees, and transferring ownership either within the family or through a sale of the company. You should have a plan in place the sets out not only who will own the business when you’re gone, but who will oversee the management and transition of the business. This goes beyond just a simple Will. Such a plan may call for multiple business entities, trusts, a buy-sell agreement if you have partners, a dividend policy, and other mechanisms to get the right people in place to continue the business without interruption. It is often prudent to assemble a team of advisors including an estate planning attorney with an understanding of business succession issues, an accountant and an insurance professional. Most important, however, is to both have a plan and implement it.
