Estate planning is an important step for every adult to take. Those with dependents like children and spouses have more of an incentive than the average person to estate plan, but there are others who need to make plans even more.
Those who own businesses may have responsibilities to dozens of other people that they have contracts with or employ. Estate planning is particularly important for business owners. Not only do you have to think about transferring the ownership of the business to someone qualified to run it or the next generation in your family, but you also have to think about how someone will run the business when you cannot do so.
Succession planning is important for business owners and executives who want to ensure that business goes on regardless of what happens to them, and the benefits a succession plan can provide are hard to deny.
Succession plans give you a say in the person who succeeds your role
There are multiple components to a successful succession plan, but one of the more important considerations is providing information about what characteristics or education will be necessary for the person who assumes your position after you leave the company.
You might want to suggest certain degrees and certifications or talk about personality traits and business experience that you deem necessary. Some people even provide a shortlist of candidates or examples of current job titles that might indicate someone could fill their role.
Succession plans provide training guidance for whoever comes next
Hands-on training with a person a new employee intends to replace can make a workplace transition more successful. You may hope to work directly with your successor, but that may not be an option if something unexpected happens. Your succession plan can include training information to help prepare someone to fulfill the obligations of your role at the company.
Succession plans can give you a place to record otherwise unknown company details
You may be the only one who knows about every financial account the company holds or the passwords to your social media accounts. Your succession plan provides a centralized location to provide crucial details known only to you about your position at the company.
Like the integration of your ownership interest into your broader, personal estate plan, making a succession plan is necessary for those who own businesses. A good plan will ensure that your company continues and your workers retain their employment even if you die or become medically incapacitated.
The sooner you address your succession and estate planning needs, the more peace of mind and protection you and your workers will have.
