Business Succession: Estate Planning and the Future of Your Business

business succession, estate planning, Illinois estate planning lawyerWhen clients come to me for help in estate planning, many of them have similar concerns. They want their family to be secure after their death and they usually have an idea of how their assets should be distributed among their intended beneficiaries. Some of my estate planning clients, however, are also business owners, and they must give consideration to the disposition of their company. For these situations, I always encourage clients to begin business succession planning as part of the estate planning process.

Business Succession Planning v. Estate Planning

While you may have accumulated significant personal property during your lifetime, distributing your assets to beneficiaries through a will or trust is relatively straightforward. Of course, there will always be some degree of challenge to the process or complications requiring particular attention, such as a family member with special needs, but, for the most part, deciding how to divide your property is often fairly simple. An estate planning attorney can certainly help you through the process.

Your business, on the other hand, may be completely different story. You will need to plan well in advance to ensure that your company is protected in the event of your death. Generally speaking, you have three basic options for your business’s succession:

  • Prepare a family member to take ownership: It is important to choose a family member who is both capable of and interested in running the business when you are gone. The preparation process may take some time, and your successor will likely need to work with your for a period of time to become acclimated with the business environment.
  • Allow your partners to buy your interest: You may create an agreement that, upon your death, your co-owners will purchase your portion of the company. The proceeds of the sale can be added to your estate to offset liabilities or for distribution among beneficiaries. Planning such a sale in advance allows you to negotiate the buyout with your partners to ensure your family receives a mutually acceptable price for your interests.
  • Sell outright at market value: This option is likely to be least predictable, as factors beyond your control may affect the sale and price of your company. As with a buyout, the proceeds of the sale can be included in your estate. However, the selling process may take longer than intended or there may not be interested buyers, which can create difficulties for your executor and your beneficiaries.

Contact a Naperville Business Succession Planning Attorney

Business succession planning is an important aspect of estate planning and when done properly, can positively impact your family long into the future. For more information or for help in developing a solid business succession plan to take effect upon your death, contact an experienced Naperville estate planning attorney. At the Gierach Law Firm, we have the necessary skill and knowledge to assist business owners in all aspects of the estate planning process.