You started your own business almost thirty years ago. What was once just a dream in your garage is now a multimillion-dollar company. It has really funded your lifestyle for decades, and everyone has benefited greatly.
But now it is time to pass that business on to the next generation. You don’t want to simply sell the company and put the money in your will for your children. You want to give them the company itself, guaranteeing their income for the future and allowing them to grow what you have created into something even better. It is your legacy and their future all at the same time.
It’s very important to get this right, so consider the following when making your business succession plan and taking other steps to set your estate plan up for your family.
Ask your children what they want and where they stand
Never assume that your children want the business or that they’re interested in running it. Always talk to them and find out exactly what they’re thinking. You want to start this process with everyone on the same page so that you can make a plan that works for them – not just a plan that accomplishes your own goals.
Remember that you don’t have to make things even
Business owners sometimes struggle to make things even when trying to leave a business to multiple heirs. They may believe that one person is best at running it, but they feel they need to leave the company to all the children equally. This creates a lot of problems in the future when those children encounter conflicts about how they actually want to run the business or who gets to make decisions. You can certainly choose specific roles for each child or you can leave certain children out of the succession plan.
Try to start as soon as possible
If you can, bring in the children who are going to take over the business after you, and teach them the ropes while you’re still working there. This can help them tremendously. Never assume that they’ll just know how to do it or that they’ll be as good at it as you have been. Take the time to train them and work toward passing the business over to them for years, rather than just leaving it to them when you pass away.
This type of estate planning can get very complicated and there is a lot of money on the line, so be sure you know about all the options you have.