If you die, your business could be left in flux. It’s important to take time to work on your succession plan and to make sure your employees or partners are ready for any changes caused by your death.
When you pass away, your business could end up shutting its doors if there is no succession plan in place. Without ownership or someone to take over management, the business could end up in probate and lose its value.
How can you protect your business if you pass away?
It’s a good idea to start talking about succession as soon as you can. With your business, you’ll have a few options. One is to pass the business on to a successor while you’re healthy, so that they can take it over with support. You should have that successor chosen early, so that there is someone in line to accept the business if you suddenly pass away.
You can create a living trust for this purpose. It will help your successor avoid probate costs and keep the transaction private, which may help them protect the business.
You can also create a partnership while you’re living, so that there is a partner to take over who already knows the ins and outs of the business. A partnership is beneficial because you get to train and select your successor. It could be disadvantageous if you have a conflict with that partner during your life or if they want to leave the business suddenly.
How can you choose the right successor?
To choose the right successor, you should think about who you’d like to have take over the business. Do you want it to stay in your family? Is there someone you’ve been training to take over your role who you’d like to appoint as the official successor? It’s smart to leave the business to someone who wants it and who knows how to run it.
There are different options available that can help you pass on your business and keep it thriving. Go over all the potential legal options, as well as their potential downsides, before you choose.
