Succession Planning for San Diego Businesses: The Dos and Don'ts

Posted by Debby EhrlichFeb 08, 20220 Comments

Owning a family business of any size presents unique estate and succession planning issues. The HBO Max series, Succession, provides audiences with an excellent narrative outlining just how complicated, emotional, and chaotic succession planning for family businesses can be.

Anytime an estate planning issue makes for good, dramatic TV should be your cue that it's time to shore up your own planning needs.

If you follow a few basic guidelines, you'll be well on your way to ensuring your own family business doesn't end up as inspiration for dramatic television.  

Do Not Wait and See

It's easy to put succession planning on the back burner while working to improve your business. Too many family business owners know they should have a succession plan in place, but ultimately adopt a wait-and-see approach.

Do Stay Ahead of Ownership Succession Planning

Instead of waiting to see if your eldest child will agree to take the reigns after they graduate, you should develop a plan of ownership succession now. Your formal plan should include compensation, contingency successors, and tax-savvy transfer strategies. The more structured your succession plan is, the more incentivized your preferred successors will be.

Do Not Do Things As You've Always Done Them

Family-owned businesses offer a certain charm in their tradition, but that doesn't mean you shouldn't periodically re-evaluate your business structure. Failure to stay flexible and implement contingency succession plans could leave your business in managerial flux at the most crucial time.

Do Re-evaluate Your Succession Plan Over Time

Ideally, your business will evolve and experience healthy growth over time. As businesses grow, it may make sense to change the corporate structure, which could require more sophisticated succession planning strategies. Be sure to revisit your succession plan periodically to make sure it still works with your business structure.

Do Not Do It All Yourself

Business owners are used to doing a lot of work themselves. There's a time and a place for this mentality, but it's not in developing a sophisticated succession plan for your business.

Do Hire an Experienced Business Succession and Estate Planning Attorney 

Succession plans for businesses are critical to ensuring a business survives from one owner to the next. These plans are sophisticated legal tools that work as a road map to ownership transfers while mitigating tax obligations. You should always work with an experienced San Diego succession planning attorney when preparing your succession strategies. Call DME Associates LLC today at (805) 312-8059.