One business owner recently told us, "I don't think I've ever heard of any business that didn't have some type of succession plan in place." Despite this fact, it's still critical for a business owner to create a business succession plan. As a business owner or CPA you are likely responsible for making decisions that will affect the company's future success or failure. Losing control of important decisions can lead to costly consequences for your business. The time to prepare for these events is early in the process and part of your succession planning. At one time when family members held the major shares of a business, the thought of having to make a business succession planning plan may have seemed daunting. Now that technology and financial markets have changed, companies find that it's no longer necessary to limit family members' participation in their company's success. Still, even if a family member is no longer an active part of the company, every business has needs for someone to act as a CEO, CFO, or other top level executives. If you're looking into your family business succession planning, here are some tips on how to begin. When making family business succession planning, remember to consider the needs of your company's key executives and the needs of your heirs. Many small businesses set aside a substantial amount of money to leave in trust for the health and welfare of their employees and heirs. Establishing an estate plan now can help you make sure your money is properly taken care of after you die or as you pass away. Some estate plans also give beneficiaries the freedom to take control of the company upon your death, although this option can be debated with the estate attorney. Most estate plans today allow for a "cash-out" to provide funds to the heirs of the deceased business owner or CEO. This can be risky, though, as many court rulings have invalidated or set aside certain types of inherited property. For this reason, you'll want to thoroughly review business succession planning strategies with an estate planner to make sure your plans follow the applicable laws and avoid any potential tax issues or penalties. Your chosen estate planning professional should be familiar with the latest developments in tax law and the intricacies of any asset protection options. He or she should also be able to recommend the best method of legally achieving a "cash-out" for your beneficiaries. You can create a family business succession plan by working with your chosen attorney. Your attorney can make sure your assets are legally exempt from inheritance taxation and can provide accurate documentation outlining the terms of your plan. He or she can also work with your beneficiaries to determine which monetary assets are protected within your will or trust. In some cases, your chosen attorney may also be able to negotiate with creditors or other liens on your business properties to ensure that they do not adversely affect the distribution of your assets. Your attorney can also help you establish and maintain a trust that will act as your vehicle for receiving your legacy. If you are still working under a will, your attorney can help you establish a durable power of attorney to allow your other family members to make medical care decisions in accordance with their own healthcare needs and desires. There are also several options available to you for creating your business succession plans. The most common method is to prepare a customized business valuation on your behalf. Your attorney will take into account your family history, business practices, the value of your tangible and intangible assets, and current market values to determine the exact worth for your business. A certified public accountant (CPA) can also help you develop your business valuation to ensure it accurately reflects the true value of your business, including goodwill and financial liabilities. However, if your family has already died or is still alive, you may not have sufficient information to prepare a credible business valuation on your behalf. There are many other methods available to business owners when it comes to establishing or maintaining business succession plans. Some choose to appoint a board of directors to serve as advisors on various matters. This board can be made up of close family members, friends, or business associates who will act as intermediaries between you and your intended successors. You can also establish an irrevocable living trust to provide a means of avoiding probate and to avoid estate taxes. There are many tax advantages to irrevocable living trusts, and they are especially helpful if one of your family members has a disability or is terminally ill. Regardless of which method you select for business succession planning, keep in mind that you should choose an experienced business attorney to handle the process. He or she will be best able to assess your specific needs and will be in the best position to recommend the best course of action for your situation. Remember, you cannot rush the process. In the end, you and your intended successor must work together to establish a plan of action that will benefit all parties involved.