Entrepreneurs interested in passing on their family business to a successor should create a legacy plan as soon as possible to protect their business in the event of incapacitation or death. By having a plan, you establish a lasting legacy for your family.
Legacy Versus Estate Plan
Your estate plan protects your wealth and possessions and ensures their correct distribution to establish your legacy. Estate planning involves honoring your Will, Power of Attorney, and the distribution of assets.
Your legacy plan is additional confirmation that your wishes for your estate are honored. While the estate plan is concerned with the financial and assets management details, your legacy is your reasoning and directions for the distribution of your finances.
What Goes Into a Legacy Plan
Your legacy plan describes how, when, and why you wish to distribute your finances and assets to specific people or philanthropic causes. In your estate plan, if you have assigned financial contributions to charitable organizations, you will describe how, when, and why you want those donations given to the charities of your choice.
In your estate plan, you may transfer ownership of your business to a family member to continue your family business. In your legacy plan, you will state the circumstances under which they will own it (upon your absence or inability to) and why you have chosen them.
You will create stipulations to approve the transfer of ownership. You may establish how the successor must undergo business leadership training and development before becoming the new business owner to confirm the successor is prepared to carry on your family business.
Why Business Owners Need Legacy Planning
Similar to the security offered by having an estate plan to protect your finances and assets for the people you love or philanthropic causes you care about, a legacy plan will honor your wishes and stipulations in the distribution of your estate.
As an entrepreneur, it is critical to protect your assets to secure your family’s future. Securing retirement is a concern for business owners – and estate and legacy planning are also necessary for receiving the security you have worked years to obtain.
Additionally, legacy and estate planning involve financial management. You’ll learn about tax concerns, creditors, and other financial concerns that may affect your legacy.
Without creating an estate and legacy plan, the probate court may mishandle your wealth and assets, potentially draining your finances and going against your stipulations if you have only created a Will. Additionally, the probate court process is costly and compromises your privacy.
To protect your legacy and secure the future of your business, book a consultation with me for comprehensive legacy planning. I look forward to helping you develop a plan for your business and future.