Thinking about Estate Planning

Recently, in our post, “… And Then Get Back to Living,” we wrote about the importance of succession planning for every business. Last week, in Inc. magazine, there was a great article, “How to Create an Estate Plan,” which provides a step-by-step guide on the most effective ways to start thinking about planning for the future of a company. It emphasizes that this is something that all business owners need to be thinking about because huge legal issues can arise without a plan for how to pass on all the necessary information about the inner workings of a business should something happen to the business owner.

Some of the important takeaways from the article are:

• Keep an open dialogue with those who will be affected by the plan, such as family members and business partners.
• This is a process that lasts as long as the life of a company and it needs to be continuously refined and updated.
• Find people you trust to work with you on planning, including estate planners, attorneys, accountants, insurance providers, and of course business appraisers.

It’s something to think about because no business owner wants their hard work, blood, sweat, and tears to be all for naught. You can take steps now to ensure the future of your company.

By: Present Value

Other posts you might find interesting:

“Five Myths of Business Valuations”

“Adjusting Your Exit Plan”

“Succession Plans”

“Business Valuations and Estate Planning”

Tags: appraisal, business appraisals, Business Valuation, estate planning, Exit Strategies, Inc., present value, succession planning
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… And Then Get Back to Living

Few people want to think about their own mortality; we’d all rather assume that we have all the time in the world. But in reality, none of us knows what tomorrow will bring, which is why planning for what you leave behind when the inevitable happens is so important.

The Wall Street Journal’s blog today published an article about the difficulty caused when a business owner died suddenly without a succession plan in place. We’ve written about the importance of succession planning here, here, and here, but a real-life example like this helps underscore the idea. 

The story, which you can read here, describes a financial advisor in his late 50s who was the sole owner and advisor in his company. When he died suddenly, his clients were left with no one to handle their accounts and ended up scrambling to find a new money manager. The irony here is that financial planners always stress to their clients the importance of succession planning, especially in sole proprietorships.

The article goes on to discuss another financial services firm with a middle-aged, sole owner that lost two huge clients who were concerned about what would happen to their accounts if their advisor died suddenly. This proves that succession planning is important for the health of a business even before the plan would be put into action by a death. Perhaps if that business owner had a plan in place, he could have reassured those clients and kept them on his roster.

 If you’re putting a succession plan in place, remember that a thorough business valuation is an important first step.

By: Present Value

Tags: Business Valuation, succession planning
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