As a family business owner, you may be concerned with the succession of your business when you die or no longer be capable to run. One of the common succession hurdles is deciding who must inherit the business and how your loved ones will manage it without you. A good decision you can make in this regard is to include a business succession plan in your estate plan. An estate planning attorney in Ridgeland can help you address such concerns and make sure your family business continues to operate even if you are no longer part of it. Here’s what your lawyer will do:
Assess the Interest and Contributions of Your Family Members
Your family business’s future viability depends on those in charge with more than a financial interest in it. Your managers must possess the abilities and skills as well as have the interest to run the business. Thus, it is imperative to objectively asses the family members’ abilities and interests to decide their future roles in the business.
As you plan for the future of the family business, define the role of every family member in any way you prefer. Determine what it takes to keep it running and designate roles. If some members of your family do not have an interest in the family business or cannot take part in the management, define their roles accordingly. Sometimes, offering external management and financial support is a vital part of the plan.
Not making decisions about what happens to the business in the future while you are still available and able can result in disastrous consequences. In fact, it can result in family disputes that can disrupt business operations and family relationships.
Consider Future Family Contingencies
Your succession plan can include provisions for future family members like unborn grandchildren. You must assign them particular roles; however, you can emphasize that they get a chance to take part in or gain financial benefits from the family business.
In addition, you can protect your business against risks from relationship issues within the family like claims from divorced family members. Not anticipating such potential can result in your business ending up controlled by non-family individuals.
Although your success plan should include family contingency provisions, keep in mind that this plan can be changed. This can happen when the circumstances of your family or your goals will change in the future. In this case, the plan can be revised to reflect your family’s new situation.