How a Succession Plan Can Help Prevent Infighting Among Family Members
A succession plan is crucial if you have a family business or a business managed by a large group of owners, shareholders, or other groups. While retirement might seem light years away, it’s never too early to plan how your business’s management, assets, and more will transition when you are no longer managing it. Because anything can happen in life–disability, different opportunities, and even death–you should jump on succession planning as early as your business starts.
Still, it’s never too late to get a succession plan in place. To create a succession plan for your business in Dallas, TX, work with an estate attorney in Dallas of Vermillion Law Firm LLC today.
What Is Succession Planning?
Succession planning creates a strategy for how a family business will proceed after the first generation of owners retire, move forward in other directions, become disabled, or pass on. Succession planning should be a formalized, legal process that ensures that the wishes of the first generation and the family as a whole are reflected.
Succession planning can be done at any time, but as with most legal documents, the sooner it is completed, the better it will be for your business. Life is unpredictable, so planning ahead for difficulties or changes is vital to owning a business.
Importance of Succession Planning
Succession planning is important for several different reasons. Firstly, it gets everyone in the family on the same page (literally and figuratively) about what will happen in the event of the first generation’s retirement, disability, passing away, or other change. No one wants to think about these kinds of events, but as a business owner, it’s important to consider how they may affect your business and what your wishes would be in terms of how the business will proceed in your absence.
Succession planning answers many key questions that business owners should consider around the succession of their business. For example, during succession planning, an owner or group of business owners can consider whether they would like management to transfer to family members, current employees, or others.
Another important feature of succession planning is its role in protecting and maintaining family wealth. No one wants to build their legacy in a family business and then have the wealth lost to the next generation. Whether you want to keep management in the family or transition the business in a whole other direction, succession planning can help you clarify and crystallize your intentions for the business in a legal capacity.
Common Conflicts Among Family Members Without a Succession Plan
Without family business succession planning, it is common for family members to quarrel about who should run the business, how it should be run, whether it should be continued, and where its wealth should go. These fights can be heated and painful enough to separate family members and deteriorate the business you worked so hard to build.
Benefits of Succession Planning for Family Members
One of the benefits of family succession planning includes the timely succession of a business in a family, clear direction for the business beyond your management, and neutralizing potential in-fighting between family members before it starts.
Start Creating Your Succession Plan Today!
If you are planning a family business succession, it’s vital that you enlist qualified professionals to help you navigate this process.
An attorney can help you with succession planning. When you are planning the structure of the business itself, an attorney can help you determine what kind of business you want to have. From a sole proprietorship to an LLC to a partnership and beyond, the type of business you have will dictate what succession planning looks like.
Whether you are just starting a business or have been in business for decades, an attorney can help you draw up a legally sound succession plan. They can also help you make adjustments or additions to an existing succession plan. Contact Dallas estate planning attorney Vermillion Law Firm LLC for business succession planning in Texas today to see how our office can help you plan the future of your business.