Yes, your will and/or other estate planning documents should include information on what happens to your business. That said, it is often best to not rely solely on the will to do the job.
That means you should discuss your thoughts and ideas with potential heirs instead of leaving them the business as a “surprise.” Do this even if you are relatively young and think it is unlikely you will die anytime soon.
Giving stakes while you are alive
One tactic in business succession planning is to give your heir(s) a stake in the business while you are alive. You can do this in several ways. For example, you could give shares via a shareholders agreement. You could also sell part of your business now to these heirs. You could bring them on board to help run the company. At the very least, it is a good idea to chat with them about your intentions so they are as prepared as possible when the time comes.
Writing a letter of intent
A letter of intent is not legally binding, but including one in your will can help ensure that your dreams for the business are fulfilled. Such a letter advises your executors on topics such as passwords, bank accounts, customer markets, expansion plans, shareholder information and more. It can make the transition much easier for everyone involved.
Opting for a trust
You may prefer to place your business in a trust instead. Taxation is high, but there is a lot of flexibility. You may be able to get more done “beyond the grave” than if you left the business outright to an heir or heirs.
Striving for fair play
Another one of your considerations may be how to split your assets evenly among your heirs. In many cases, leaving your business equally among an even number of heirs can lead to progress never being made. With an odd number of heirs, decisions should be easier to make. On the other hand, some business owners sell their business before they die and divide the proceeds from the sale evenly among their heirs.
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