Estate Planning and Business Succession Planning

Do you own a business? If so, now may be the opportunity of a lifetime. Many business owners found their company with long term goals in mind such as passing it down to future generations and growing an empire for their family.

Unfortunately, plenty of research indicates that the likelihood of passing on a business to future generations diminishes with each passing generation.

What Happens if Your Children Don't Want the Business?

Even your own children may be disinterested in developing the company even further. They may have no interest in the industry and have pursued a different career path altogether. There is good news, however, indicated by some recent research that shows that now may be the business selling opportunity of a lifetime for someone who owns a business.

If you already have a business succession plan in place, there's a good chance there are clear guidelines around how and when you can exit. If you haven't put together a business succession plan, however, you're in the same boat as many other successful business owners. Planning, though, is key to enabling options in the event of a future emergency.

What Makes Now the Right Time to Consider Selling?

Historically low interest rates over the past couple of years have been a major catalyst for the growth of the economy but this has also led to many more private equity firms looking to invest in a number of different small businesses. To identify whether or not your company could be in the running to go up for sale and cash out if your loved ones are not interested in growing the business on their own, you need to first consider your foundational documents and business succession plan. Many successful companies today omit this crucial part of their individual estate planning and long-term business planning. You must always be thinking about transitioning out of the company whether it is a planned exit such as a retirement or a surprise exit such as a disability or other personal issue. Business succession planning considers the unique individual needs of the business owner as well as the possible beneficiaries and articulates a plan by which the business can be passed on to future generations.

Business Sales and Private Equity Are Up

According to Biz Buy Sell insight reports, a record number of small companies were sold in the third quarter of 2017, which shows tremendous promise for those businesses thinking about going up for sale. Private equity funds have also been raising much more money in recent years and this has been a record breaking year for small business transactions.

Having a business succession plan enables you with maximum opportunities as it relates to retirement and estate planning. It is not always easy to look that far into the future but developing a clearly articulated plan for your individual needs can empower you with maximum choices when it comes time to pass on the company. This can allow you to determine how the owners of a company may come together and identify whether or not a sale is appropriate.

It can also allow a business owner or manager to step out of the company quickly in the event that an emergency arises. Furthermore, business succession planning should also consider the benefits of asset protection planning.

A business owner who spends his or her entire life developing the assets inside a company should plan to protect them from potential lawsuits, divorces, and other challenges in the future. The right estate planning attorney is an important advocate for the business owner in all of these complex considerations at the junction of estate planning, asset protection planning, business succession planning and more.

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