• A succession plan provides a road map for partners, heirs and successors to follow in the event of a business owner’s death.
• A succession plan should include clearly established goals, objectives, and the company’s current financial resources.
• Business owners should contact an estate tax attorney and an accountant to address the tax and legal issues associated with succession planning.

A succession plan is a documented road map for partners, heirs, and successors to follow in the event of a business owner’s death, disability, or retirement. This plan can include a program for distribution of business stock and other assets, debt retirement schedules, life insurance policies, buy-sell agreements between partners, the division of responsibilities among successors, and any other elements that affect business assets. The plan may also establish the value of the business, which is extremely important in estate tax planning.

So where should a business start? In the succession planning process, the business must first clearly establish their goals and objectives, as well as the company’s current financial resources. If the owner is retiring, how much control of the business do they want to retain? Is there someone capable of running the business or should the owner realistically be planning on a total sale of the business? Basically, who’s going to drive the truck?

Estate taxes are another area to consider when doing succession planning. There are varying tax and legal issues associated with giving a business to heirs, selling it to the public, or dissolving it at the time of death. An estate tax attorney and an accountant should be consulted on these matters to assure the most financially beneficial transition possible.

It’s also important to know that a succession plan must be flexible. Business, family and health situations are dynamic, and the plan must be easy to modify and amend. Equally important is for a business owner to make their wishes known to their family and others in leadership positions within their company. A plan for the company when they’re gone, that’s all in the business owner’s head, is not really a plan at all. They may have spent years and years growing the business. When they leave, either by retirement or death, their family, employees, and colleagues should not regret what they worked so hard to create.

Keep in mind that a business owner’s love for trucking may not be equally shared by those around them. Giving a business to a relative, spouse, or child is not always the best thing to do. Make sure the successor is clearly seen as the successor, not a pretender to the throne who can safely be ignored or discounted. Furthermore, when the owner is really ready to hand over control, let it go. An entrepreneur who lurks around his or her business after handing over the reins is only undermining the effectiveness of the person he or she has chosen to lead the business. So when it’s time to leave, leave.

A well thought out succession plan will make a business’s transition smooth and relatively pain free for all parties involved. The question of “who will drive the truck” will be a simple one to answer as the decision will have been made long before the keys are handed over.