Your business is probably your largest single asset and you cannot have a workable Estate Plan without a solid Succession Plan in place. Your Estate Plan is not your Succession Plan and your Succession Plan is not your Estate Plan.

Succession Planning is preparing for the day you exit your business and what the business will look like after you do. Estate Planning is deciding what happens to everything you own during your life and when you die including your business if you still own it. Estate Planning can get messy and costly if a Succession Plan for the business is vague or incomplete.

But where do you start? First take a quick general inventory of what you own. If you have not had your business valued do this straight away. Start to think about your business after you leave it. Who will own it and do you want it to continue? Think of it in relation to your business partners (if you have them), your family and your key stakeholders.

When you begin the inventory of everything you own does not have to be exact. It is more important to get a general understanding of where you are financially, what you own and how insurance fits into the picture. The details can come later in the planning process. Valuation of your business is important at the start because this is such a critical number to know when creating a succession plan. When you see the size of your business compared to everything else you own this will help motivate you to do the right planning. Many owners are surprised to find their business makes up more than 50% of everything they own. They just haven’t paused to think about it.

Business owners have five primary asset categories:

  • Business – Single or Multiple
  • Personal Property – Homes/Properties, Jewelry, Collectibles etc.
  • Investments – Securities, Stocks, Bonds, Cash
  • Tax-Qualified Assets – Typically Retirement Plans
  • Insurance Policies – Life, Disability, Annuities & Long Term Care

Value and Protect your business with a coordinated Succession and Estate Plan. Take a quick inventory and give it some thought before you talk to an advisor. Your preparation will make a big difference in time and money saved.

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