You have worked hard to grow your business, but you aren't going to be able to take it with you when you pass away. Instead, you need to ensure that you are making plans today that can set up the business in a way that will be able to help support your family if something does happen to you. As a responsible business owner and loving family member, you are probably thinking that you need to get something done right away to encourage everything to transfer over smoothly when you do pass away.
Succession planning is the way that you can get this done. This plan isn't one simple plan. Instead, it is comprehensive plan that must include instructions for short-term issues, such as you becoming incapacitated, and long-term issues, such as death.
When you are creating the succession plan, you need to think about who is going to take the head position at the company. Your spouse is an option, but your children are also options. You could even opt to have a nonfamily member take the helm. In order to make this decision, you must think about who can make solid business decisions.
On top of naming the person who will run the business, you also need to think about the money. In some cases, you will need to balance the business assets and your estate. This can be complex if you are leaving the business to one adult child but have more than just that one offspring.
Use a life insurance policy to balance out what happens. This means that you could ensure that your children, or other beneficiaries, each get an equal share of the total estate that includes the business and your other assets.
Source: Forbes, "Don't Let Your Family Business Die With You," Mark Eghrari, accessed Jan. 19, 2018