According to statistics, 80 to 90 percent of businesses nationwide, including in New York, are owned by families. However, a significant percentage of those businesses are lost before making it to the third generation. This is said to happen because succession planning is often neglected when drafting wills and other estate planning documents.
Family members, customers and employees rely on business owners to plan smooth transitions in the event of illness or death. The chances of losing a business are significant if no succession planning is done. However, every company is unique and has different factors to consider in order to make the appropriate decisions.
Matters to consider will include family dynamics to determine which members are willing to, but also capable of managing the business. Potential family disagreements and ownership percentages will feature in the planning, as will liquidity and estate taxes. Uncertainty can have internal and external effects on employees and customers, and assurance that plans are in place can ease the minds of all.
Owners of family businesses in New York might find it daunting to make decisions about successors, but the task may be simplified with the support and guidance of an experienced estate planning attorney. Some believe the importance of succession planning exceeds that of drafting wills. However, with skilled legal counsel, this can all be done as part of the overall estate planning. A lawyer who is already familiar with a business owner's affairs can explain the different options and succession planning vehicles that will accommodate the unique dynamics of the family.