Keys to Spousal Business Succession

All businesses are not created equally. Entitlements and protections vary under state statues according to how a business was legally structured when it started operation. For instance, ownership interest of a company started and continually operated as a sole proprietorship ends when the owner can no longer participate in its activity. Companies created and operated as a corporation, partnership or as a limited liability type of either have owner interests to transfer.

The development of a successor spouse's action plan starts through self education. This can happen through dinner table discussions and reading trade magazines. The education should be broad in scope.

Detailed operating knowledge of company operations is not required because businesses change daily in response to demands. Instead, the successor should prepare themselves to make crisis decisions.

They should consider what their first steps in implementing an action plan would be.

Different triggering events require different responses. Before any options are exercised, the first step of an action plan should be to gather all available information about the company. Confidential disclosures, useful short cuts, administrative information, operating mechanics, guidelines and overviews detailed in an operating plan prepared by the operating spouse would be valuable aids in decision-making. The use of a suggested trusted advisor could be of tremendous importance for support and guidance. From whom and how a spouse obtains assistance should be part of an operating plan document.

A prepared spouse with an action plan can hold the golden key that makes the difference for a business's continued operation and a family avoiding unnecessary financial crisis when unfortunate events strike.

Dick Yemm is an author, speaker and consultant on succession planning. His award-winning book, "The Stories," was developed as part of the series Tomorrow - Your Business Without You. They are used in his seminars on contingency/succession planning for business owners and their families. Dick is a professionally licensed certified financial planner™ and holds multiple levels of security licenses. For more information call (772) 562-1281, email rileyspress@atlantic.net or visit www.yourbusinesswithoutyou.com.

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