What is Succession?
Succession isn’t just the creating and signing of a will. Succession law redistributes the property of a deceased estate upon the death of its owner to the beneficiaries entitled, either in the will or by the law. Succession is concerned with the deceased person’s property whether there was a will or not. Lawyers who are involved in estate planning will guide their clients through the estate planning process. Lawyers will discuss the details of your succession plan before drafting the will. This creates an easier process of drafting the will and getting it right the first time.
Every situation is different. Some people have homes, cars, businesses, or other assets that some may not have. Along with all the assets are different whether it large or small business or a used or brand new car. Some people may want to exclude family members from their estate while others may want all family members to have an equal share.
In terms of succession in businesses, succession planning is in the case of the owner or key member of management ends up leaving the company, is terminated, retires, or dies. This ensures that the business does not have to stop its day to day activities. It will outline the change in leadership that may occur provided that the before mention were to happen. Creating a succession plan could benefit the company by retaining key employees, reducing the tax burned, and maintaining the value of its stocks and assets during the transition of ownership. This also provides the owner with a sense of comfort since leaving won’t burden the company.
Although there are many benefits to having a succession plan in place, many do not. An owner may not develop one because they do not want to choose a successor, they don’t have many interests beyond the company, or they do not want to confront their mortality. Succession planning entails details that compares to planning one’s own death which may cause a discomfort.
Succession can take many years to plan and the implementation can take longer. Taking the time to create this plan will assure them a way out of the company with enough assets for retirement. The business owner could sell the company to an outsider, family members, retain the ownership and hire new management, or sell to the employees. Owners need to initiate the idea of a succession plan, select details that will be included, educating the successor, and the final transition of the plan.
**This article is for informational purposes only and is not intended to be legal advice. In relation to your individual situation, always seek advice specific to your circumstances from a lawyer.