fred-corbalisA common issue that I see with new business owner clients is the lack of a succession plan. No it’s not so fun to contemplate death but consider the following:

1. Will your spouse be able to depend upon the benefits of your business if you died tomorrow?

2. What about your minor children or other dependents?

3. Who will run your business in the event of your disability or death?

4. Who is authorized to conduct checking or sign contracts on behalf of your business?

5.  If you have co-owners, do you have a buy-sell agreement in place that protects all of you against death, disability, divorce and creditors?

6. Is there a deferred compensation arrangement in place?

7.  How long will your health insurance be available in the event that your family is under the business’s health plan?

8. Will your trustee (if you have a living trust, do you?) have any guidance on how to operate your business? (Note in 2011 the lifetime exclusion is only one million dollars and the top rate is 55%.)

9. How will estate taxes attributable to the business be paid?

10.  Have you done lifetime planning for the business which reduces it’s value for estate tax purposes in the event of your death?

11. If you have family members working in the business, do you have a plan for what will happen to them on your death?

These questions are the tip of the iceberg when it comes to issues business owners should address.  It is very easy to ignore how important you are to your business.

However, succession planning, insurance planning, trust planning, buy-sell planning, and operations manual planning are all important to protecting you, your loved ones, your business partners, and of course your values.

Often times it’s easy to delay this type of planning, with excuses ranging from “I’m too busy” to “I’ll do it when the economy recovers.”

However, whatever day is fated for us does not care what we have done and left undone.  Without  such planning, a very dark day can be made even worse as the world, and those most important to us, our loved ones,  go on without us.

A suggestion on how to start:  print this blog and have a joint meeting with your attorney, CPA, and financial advisor–each has both unique and overapping expertise in relevant areas and together they can help you form a plan which protects you and your loved ones.