As a business owner, you have to ensure that your company has plans set just in case certain things happen. It might surprise you to learn that your estate plan plays a role in this. Once you have the plan set for your personal assets and affairs, you can set up the plan for the company.
There are three primary considerations that you have when you’re developing a succession plan. These include:
While there might be some similarities between all three, you have to set clear terms for each. For example, you have to outline how you will take your position and responsibilities back when you’re able to if you overcome the condition that left you incapacitated.
You should include the contingencies that will go into effect if your successor has to step into your position. Ideally, you’ll be able to work with them to get them trained and prepared for the responsibility that they’ll take on.
There are some instances in which a plan to close the business, sell it someone else, or transfer ownership to another partner might be in order. Make sure you have this clearly noted in the succession plan if that’s what needs to occur.
Your succession plan can help your employees transition to the new way of doing things at the company. Making your plan as clear and concise as possible is imperative. Remember, you should review your estate plans periodically to ensure that they still reflect your current goals for what will happen with the company if something happens to you.