You hear a lot about estate planning and the need for it. Generally, most planners talk about what will happen when you die. I try to help my clients focus on what happens if they live a long time, or if they are dealing with or developing a chronic illness – what is the plan?

Let me talk about another type of planning – setting up a plan to pass on a business – a plan that needs to be implemented now.

Seven years ago, I brought a young attorney (Jenny Walters) into my law practice who specialized in long term and elder care planning. I had been my own boss for the better part of 30 years. With Jenny’s assistance, we were able to help more families. Yet, I still liked being the boss.

I spoke in another article about a repelling incident last year in Costa Rica in which I had a ten minute near death experience. That incident caused me to reexamine my priorities and look at what type of plan I had in place.

As a result of that, I knew that I needed to have a plan in place, should something happen to me. I have too many staff members and clients dependent on me and my office.

Recently, I spoke to a group in Colby. I told of my near death experience and how we need to be prepared. I really spoke of it in terms of a business. What is going to happen with the business? Afterwards, a person (I am going to call him “Fred”) came up to me and said, “Well, this really did not apply to me. I have a lot of money and a lot of land. I do not need to plan yet.”

I wondered if Fred and I had been in the same room together; I also wondered whether I had communicated well enough to make Fred understand what was wrong with his approach.

When you have a business (and yes, a farm is a business), or you have a significant amount of property, you need to plan for a succession of that business or property. Is it to be liquidated? Is someone supposed to run it? What about those who depend on that business for a livelihood? What about your customers? Who gets what? Do you need to equalize distributions? Is the person that is going to obtain your property prepared to manage/run it?

I have been in meetings in post-death situations, reviewing the will or trust with a family. I hear things like:

“Daddy would want us too…”
“Mom would want us to liquidate the business and divide it equally.”
“Our parents gave you more, so now you need to get less or pay back what they gave you.”

It can really turn ugly.

Nothing can turn a family or friend against each other like the passing of a business or a farm, without instructions and without some type of transition plan.

That type of planning really involves coordination with not only your attorney, but with other professionals such as your accountant, your insurance agent, and your investment advisor. The transition of a business or a farm may call for some intricate planning and preparation.

I am trying to imagine what will happen if Fred dies unexpectedly, or just never gets a plan in place. I can certainly see a severely fractured family.

Recently, Jenny (the young associate I hired seven years ago) and I sat down together with the help of our accountant and other professionals. We created a plan. Jenny will become a stockholder in Clinkscales Elder Law Practice, P.A. It addresses what would happen if something unfortunate happens to me (or even Jenny), and it lays out a plan so her future and mine are more defined. More importantly, Jenny will be involved in some of the day to day operations – to get her prepared.

While I am a long way from giving up my practice, I know that I have a plan in place with Jenny. I am sure more people will become involved in the plan in the future, but for right now, I sleep much better knowing that there is a succession plan for my practice. That plan is not only for my practice, it is for my family, my staff, and the clients we serve.

I hope that you will consider creating a plan for the transition and succession of your business. It does not mean you have to die. In fact, it may include a way for you to retire. Do not wait until the last minute to do this. Be willing to pass the torch.

Given the success of the process that Jenny and I went through, I may go repelling again!

Randy Clinkscales of Clinkscales Elder Law Practice, PA, Hays, Kansas, is an elder care attorney, practicing in western Kansas. To contact him, please send an email to [email protected]. Disclaimer: The information in the column is for general information purposes and does not constitute legal advice. Each case is different and outcomes depend on the fact of each case and the then applicable law. For specific questions, you should contact a qualified attorney.