If your family owns a business, you may be concerned about how to pass it along to your loved ones after you die. A common issue to address when planning the future is deciding who gets the family business and how the business must be run without you. If your estate plan includes a business succession plan, your Moorestown NJ estate planning lawyer will help address such concerns and guarantee the family business’ continuity.
Assessing the Interest and Contributions of Your Family Members
Your family business’s future viability relies on the people who will run it. It must be managed by individuals who possess skills and abilities as well as an interest in operating the business. So, to determine what happens to your business when you are not part of it anymore, you must make an objective evaluation of your family members’ interests and abilities. This will help you decide the roles they will play in your business when you are no longer around.
When making a plan for your business’s future, define the role of every family member. You can determine what’s important to keep your business running and assign roles. Also, define the roles of family members who don’t want to take part in management. Sometimes, your plan may need to include provisions for third-party support.
If you let your family members decide the future of your business, this could lead to serious consequences. In fact, this can result in family disputes that can disrupt the business and ruin family relationships. This is how estate planning can help avoid family conflicts.
Considering Future Contingencies
Your business succession plan can provide for your family’s future members. While you may not assign these future members specific roles, you can provide them with an opportunity to take part in or gain financial benefits from the business.
In addition, you can protect your business against risks from family relationships like divorced or divorcing spouses of members of your family. By anticipating such possibilities, you can be sure only members of your family can control your business.
Although your succession plan can provide for some family contingencies, keep in mind that this plan is only temporary. Should your family circumstances or goals change someday, this plan can be reversed to reflect the new situation. However, because you may not always remember to update your succession plan when changes take place, you must address common possibilities you can anticipate when making the plan.