While thinking about business succession planning, you have probably come across some rather daunting statistics. For instance, a massive 70% of family businesses do not make it to the next generation. About 88% fail by the third and 97% fail by the fourth.
When you think about how many people do their estate planning, it's easy to assume that every adult must have some sort of plan. After all, everyone has assets, even if some people have more than others. Many people have children. And, above all else, all people are going to pass away at some point. That's the human condition. It's the world we all live in. Certainly, we're all prepared, right?
As a newly divorced mother, you probably have a lot on your mind. For example, you have to figure out how to provide everything your children need on just the income you currently have and the child support you receive. Many divorced parents only realize after the end of their marriage that child support typically does not cover even half of the monthly costs caring for a child incurs for your household.
Are you thinking of using an incentive trust to give your heirs motivation as you pass your assets on to them? One of the most common ways that parents use an incentive trust is by specifying yearly payouts that are tied to employment. For instance, the child could get $10,000 per year from the trust for every year that they hold a job for all 12 months. In some cases, parents just stipulate that the trust pays out the same amount that the child earns, giving them extra incentive to work harder.
You own a family business. It's been successful, but you worry that your children simply see it as an easy career. By virtue of the sheer luck of being born into your family, they will always have a job waiting for them.
Estate planning after you have been diagnosed with Alzheimer's can be problematic for your family. They may not think that your estate plan is accurate because of your condition.
Don't assume that your heirs will get an asset just because you leave it to them in your will. In some cases, other types of paperwork actually take precedence over your will.
If you have a child with special needs, a big part of your estate planning is likely setting up a special needs trust and other systems to support the child when you can no longer do so. You understand that your role as a parent is different than most, and your child may need life-long care. The trust can help to provide that for as long as possible.
Ever since you started your business, it has been your dream to pass it on to your children. You want them to love it as much as you do. You want them to have a source of income. You know how hard it was for you to find a career path, so you hope to give that to them and make their lives easier.
Estate planning involves far more than just 10 steps. In fact, one of the reasons that people often put it off is that they feel intimidated by the sheer amount of work that they know it's going to be.