Estate planning is about making sure your assets and belongings will go to the people and organizations you want to have them after you die, with as little delay and costs as possible. It is about planning for the possibility of incapacity before you die. It is also about planning for successors in all areas of your life when you are no longer here and able to perform your responsibilities. Consider, for example:
If you own a business, it provides for your family, your employees, and your clients. Business succession planning is critical for the business to continue in your absence. You may want the business to be run by one of your children, a business partner, or a key employee. You may want your employees to own the business through an Employee Stock Ownership Plan (ESOP).
But without a written plan, the funding to make it happen, and careful grooming of the right successor, the business you spent most of your life building and running will likely disintegrate without you. A 2001 study by Small Business Review found that only 30% of all family-owned businesses survive to the next generation; only 12% make it to the third generation; and a meager 3% are functioning into the 4th generation and beyond. The overwhelming reason is that most owners do not plan for their exit. And you will eventually exit your business due to retirement, incapacity, or death.
You already know that you need to name a successor for those who depend upon you: minor children, an aging parent, your spouse or a child with special needs and, yes, your pets. Life insurance or your assets may provide the needed funds, but someone will need to manage the money and make financial decisions. You also need a plan for their care if they outlive you. The more you can plan and put into place now, the smoother the transition will be in your absence.
Consider your role as patriarch or matriarch for your family. Who will succeed you as the one others come to for advice, wisdom, and counseling? Have you been teaching your children and grandchildren the values and lessons you want to pass down to future generations as part of your legacy? Are you grooming anyone as your family successor?
Consider also your business and charitable endeavors. You have probably gained valuable experience in your chosen field of work or life passion. Are you mentoring someone younger than you who can continue your work?