Estate planning can be a complicated process that takes significant time and energy - especially for members of family owned businesses. However, a good plan can be achieved with some preplanning before entering the process with your professional advisors.
1. Identify your goals and objectives. The design of your plan will key off of the goals and objectives that are most important to you. Do you want to avoid probate? What is your legacy for your loved ones? Do you have charitable intentions?
2. Consider the needs of your beneficiaries. Will your spouse or partner have sufficient funds to maintain your current lifestyle? Do you have minor children? Are there sufficient funds for college? Do you have a special needs beneficiary? Will your family business provide sufficient income for your beneficiaries?
3. Prepare a list of all of your assets and the approximate value. It is surprising how many clients do not know what assets they own. Estate planning requires an analysis of what types of assets are owned, who owns the assets, and what is the value. Are the assets owned by the individual or by the business?
4. Consider whom you would select to serve as a fiduciary. Your spouse, children or other family members may not be an appropriate choice. You may want to consider using a corporate fiduciary that will have sufficient skills and experience to deal with the administration issues created by a death. When a business is part of an estate, the administration can be even more complicated.
5. Review your established plan. If you already have an estate plan, how has your life changed since you did the the original plan? Have you married? divorced? had a family? How has the business changed?
Estate and succession planning for family business owners is a process and a journey. Your estate and succession plan is never completed. Just like your business plan, it needs to be reviewed periodically!
