Succession Planning – The ‘Hot’ Topic!

“It is never too early to start….” is what I continue telling my business clients in regards to succession planning. “And, really it isn’t!” In recent weeks, I have had many conversations and formal meetings with some clients to start or continue discussions around succession planning. ‘Succession’ is a hot buzz-word right now because baby boomers are retiring or considering retirement in mass numbers. Continue reading if you want to learn more about some of the talking points Jim Wagoner, CPA has discussed with his clients in recent weeks.

Succession planning is never a discussion I can have once with my client then forget about. There is a lot of preparation that goes into the mechanics of successful succession planning. I believe you can’t have succession planning without financial and retirement planning. Furthermore, you can’t have financial and retirement planning without having income and estate tax planning. These life objectives all go hand in hand, in my opinion. These conversations may involve the CPA, the attorney, the financial advisor, the banker and perhaps the insurance advisor. Fortunately, many of my clients have these key advisors giving them sound advice. Although, it is important that all the advisors, and the client, be on the same page.

I believe it is important for my clients to have a legacy statement. Think of a big red ‘X’ on a treasure map that marks the treasure. Your legacy should be your wishes, the treasure, after successfully transferring your business, successfully meeting your retirement objectives and successfully preparing your estate for your demise. We all want to get to the big red ‘X’ but somethings won’t be easy. There will be roadblocks, setbacks and detours, but it is easier to tweak your plans rather than starting back over from the beginning. This is the reason I think it is important to start with a legacy statement that captures your general wishes so your advisors can guide you down the path to your treasure.

I have started my succession plan. You may think to yourself, ‘Jim, you’re too young to think about a succession plan.’ Well, thank you! But seriously, my written plan is an ‘emergency’ succession plan and is more for the sake of my clients, not me. I, as well as my business partners, believe is it important to be prepared and have in writing what should happen if I wasn’t here tomorrow. My plan outlines how to successfully communicate with clients and transition relationships. I want my business to successfully continue when I’m not around.

That brings up my last point. You may think it is too early to start planning, but think of the others around you like your business partners and your family. I’m sure they would have peace of mind if they knew you had something in writing as to how you want things handled when you’re not around. So, start with an ‘emergency’ succession plan and evolve with a legacy statement and an action plan. Share it with your key advisors.

If you would like to start discussing the process of succession planning, please feel free to reach out to me or any of my partners at Greenwalt CPAs Inc. Let our experiences help you be successful.