What is Succession Planning?
Succession planning is a crucial part of ensuring your company’s longevity and security. If you set a comprehensive succession plan in place early on, your organization can navigate leadership transitions and other unexpected events with ease.
At its core, a sound succession plan involves several important steps, including identifying key positions, choosing qualified candidates and training promising employees. Often, management works with Human Resources or other personnel experts as they work through the succession planning process.
In addition to the people/organizational aspects, tax planning and its impact on a business and personal estate are other considerations to include when laying out a formal succession plan.
When drafting a plan, many organizations allow for two categories of events: death/accident and retirement. Death/accident plans are reserved for worst-case scenarios and should be finalized long before they’re needed. Retirement succession plans are usually executed gradually over a long period of time and focus on a predetermined date, most likely several years in the future.
Your organization’s succession plan should be enforceable and binding, and it should protect you from any potential lawsuits. A strong succession plan will prevent others from attempting to disenfranchise your intended successors.
There are several complications that can potentially alter the integrity of your business upon transfer including:
- • The unintentional revealing of confidential information
- • Liabilities involving the communication of your departure, or lack thereof
- • Restructuring of the entity’s organization
- • Sudden death that enacts state inheritance laws (may not match your wishes)
Navigating the legal implications of defining your business’s legal future can be complicated, but Colligan attorneys specialized in the area of succession planning can provide sound advice and legal solutions to facilitate a successful transition. Contact one of our team members listed on this page directly or fill out our contact form.
Looking for additional support for estate planning? Colligan attorneys specialize in this service area as well.
See estate planning and probate law information here.
