I’ve explained in previous posts how one of the major objectives of estate planning is to make sure your assets and belongings go to the people and organizations you want after you pass away, with as little delay and costs (fees and taxes) as possible. But good estate planning goes beyond this—it plans for someone to take your place (a successor) when you are no longer able to perform your responsibilities due to death or incapacity.
Think of all the areas in your life that would need someone to step in and take your place in your absence. Do you have someone you take care of? Whom do you provide for besides yourself? Is there someone you guide or mentor? Here are some areas you may or may not have considered:
- Your business. If you own a business, it doesn’t just provide for you. It also provides for your family, your employees and your clients. Business succession planning is critical for the business to continue–and grow–in your absence. You may want the business to be run by one of your children, a business partner or a key employee. But without a written plan, the funding to make it happen and careful grooming of the right successor, the business you spent most of your life building and running will likely fall apart without you.
- Your family. If you provide financial assistance or hands-on care for an aging parent, your spouse or a child with special needs, you need to plan for a successor. Even if they receive life insurance payouts or inheritance, someone will still need to manage the money, write checks and make financial decisions. You also need a plan for this person’s care if they outlive you. Will another family member take over? Will the loved one need to move to a care facility? The more you can do now, the smoother the transition in your absence.
- Your minor children. If you have young children, you need to name a successor (guardian) to raise them in your absence. If you don’t do this and something happens to both parents, a judge who does not know you or your children will choose someone to raise them without knowing your preference. Moreover, you need to assess whether you have enough assets to provide for your family if something happens to you? Would your spouse be able to make it without your income? What about college for your children?
- Your pets. For some people, their pets are their children. Most pet owners would agree their pets are part of the family. Who will succeed you as their owners if they outlive you? Have you planned for their care?
- Your role as head of the family. If you’re the family matriarch or patriarch, have you thought about who will succeed you as the head of your family? Which of your children or grandchildren would continue the values and lessons you want to pass down to future generations as part of your legacy? Are you grooming anyone as your successor?
- Your charitable endeavors. By a certain point, we have all gained valuable experience and even wisdom. Are you mentoring someone younger than you or helping run a charitable organization? Leaving a charitable legacy can be one of the most fulfilling aspects of creating an estate plan.
Planning for successors in all areas of our life demonstrates to others how much we care about them. To learn more about how to you can create customized succession plans, email us today at [email protected] or call us at 480-442-4175.
