Estate Plans Are Not Succession Plans

You don’t have to die to win! So much of traditional family-business planning revolves around death issues that the plans don’t answer one important question: What if you live? The result is that family-business owners complete their estate plans with their lawyers and financial service professionals, breathe a sign of relief, and say, “Wow! I’m glad my succession planning’s over!” Estate plans are a must, but they are unequivocally not to be confused with succession plans.

There is, of course, the possibility that one may die soon, but the probability is that a family-business owner will live to a ripe old age. Furthermore, drop-dead plans deal with only ownership-succession planning — they’re silent on management-succession issues.

Wayne Rivers President The Family Business Institute Raleigh, N.C.

Before it's here, it's on the Bloomberg Terminal.