For business owners, estate planning often means succession planning. Passing a company on to the next generation is an hugely important step in securing the family's wealth, perhaps for generations to come.
Unfortunately, people often make a lot of mistakes during this process. Below are a few examples so that you can know what to avoid.
- Never making enough time to do it. This isn't something you want to put off. You may hope to run the company for another decade, but you're better off to have a plan in place early in case a disease or an accident makes that impossible.
- Being afraid to move on. A lot of people make excuses -- not having enough time being one of them -- because they just don't like this step in their professional lives. They don't want to move on and away from the company they built. It's inevitable, though, so fear shouldn't hold you back.
- Not understanding the legacy they're creating. Picking the right person to take over really defines the company's future. That's the legacy that is being left behind. This process is worth plenty of time and attention for those who want to leave something impressive in their wake.
- Letting competition get out of hand. With multiple people -- sometimes siblings -- competing for that leadership position, relationships can grow strained. When someone finally gets picked, the rift this competition created may never heal.
Succession planning isn't something you should put off until the last minute. Make sure you know what steps to take and all of the legal options you have to create the ideal future for your family and your company.
Source: Entrepreneur, "Common Succession Planning Mistakes -- and How to Avoid Them," Beth Miller, accessed March 02, 2018