Do you and your business partners have a buy-sell agreement? Do you have a spouse or heir who will take ownership of your business interests after your death? Have you identified a successor to run your business when you no longer want to, or are able to?

Paul Ditlevson, director of Legacy Estate Programs at Ashland University in Ohio, stated in a recent press release that 80 percent of small business owners have no substantive succession plans in place, yet more than two-thirds of them expect to leave their businesses within the next 10 years.

According to attorney Michael J. Hamblin in Michigan Lawyer Business Blog:

Many business owners think that succession planning is concerned only with naming a successor. But, there are a number of other issues that are addressed in a comprehensive succession plan. A good plan should address such issues as how the business owner plans to reduce his or her role, how the business owner communicates his or her departure to employees, and what will happen to the employees’ benefits.

Estate planning options for business owners include:

• selling or gifting the business to family members while still taking retirement income
• automatic buyouts of the departing shareholder’s interest, by the remaining shareholder(s), under a buy-sell agreement
• employee stock ownership plans (ESOPs), which allow the owner to depart day-to-day activities of the business, but keep control until retirement or death
• arranging business assets to personally own intellectual property so that the business will pay a stream of licensing or royalty income to heirs or successors after the owner’s departure

The important message here: your will isn’t sufficient. Work with your accountant, financial services professional, and estate planning attorney to provide for the continuity and survival of your business.