The New York Times recently had a guest article entitled "Is My Family Business Going To Be An Orphan?" written by an entrepreneur who owns five businesses. It is insightful since the writer held a meeting with his family to discuss succession and shares his experience.
The general school of thought is that small business owners and professional businesses should start succession planning 5 to 10 years before the anticipated transition. We also want clients to consider what happens if if they become disabled or pass away before that time. Does anyone want their business to be passed through a will (not recommended) or without one?
Why does this important business plan get delayed? Many business owners are so focused on day-to-day business operations that they fail to invest the time to develop a succession strategy. Each company is different but we like to ask some basic questions to help clients focus on their goals: Is most of the client's estate tied up in the business? Is there a spouse or children to support after the owner's death or disability? Are there any family members working in the business? Does the business require special licensure to own and operate the business (medical practice for example)?
When we meet with business owners, we combine estate planning with corporate and financial considerations so that the client can consider all options. Options can include selling, transitioning to a family member or business partner, or dissolving the business. Many complex issues should be evaluated during succession planning before coming to a decision because each business is different.
Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga and Mooney. For a complimentary 30 minute consultation (telephonic or in person), you can email Hank Moravec at email@example.com or call him at (626) 793-3210. The firm website is http://www.moravecslaw.com