If you are a small business owner, you represent a significant demographic in our American economy. Did you know that more than 99% of all U.S. businesses are considered to be small businesses because they each employ less than 500 people? More interestingly, approximately 90% of all businesses employ fewer than 20 individuals, and 70% of all businesses employ less than 5. Small businesses and their owners number in the millions. However, 70% of those businesses never continue to the second generation, and 90% won't make it to the third.

The success and longevity of your business are not only important to the economy as a whole, but also a vital part of any estate planning conversation. Remember, estate planning, by definition, has to do with the strategic management and distribution of every asset you own or have an interest in – no matter what it is or where it is. Certainly you've given some thought to your business in terms of ownership, income and protection now and into your later years, but have you created an exit plan or succession plan? Does that plan dovetail with and enhance your overall estate planning objectives?

Neglecting this important area of estate planning means you could already be poised to inflict a lot of unnecessary difficulty and loss at the worst possible time for you and your family, as well as your employees and their families. Your role as a business owner has an end date, and that day will come whether you plan for it or not. Unless you plan to sell your business, one of three life events is certain to occur – you will retire, become incapacitated, or die. Does your business end at that point or does it continue?

The statistics above tell us that when you are no longer running the operation, the doors to your business will likely close for good. If that is your intention, then have other provisions been made? Are there steps included in your comprehensive estate plan that direct your family through this transition?

If it is your intention that your business survives your departure, then whether it is planned (i.e. retirement) or unplanned (i.e. incapacity or death), a completely different set of steps need to be implemented in your estate plan to orchestrate that transition.

Your professional estate planning team is equipped to assist you with this important element in your comprehensive plan. Utilizing insurance, trusts, entity structuring, or even charitable strategies when appropriate, your advisory team can help you to achieve your goals in the most efficient way possible. Whether it is your intention to sell or maintain your business going forward, and which individuals will likely play a part in those plans (e.g. family, partner(s), employees, charity, etc.), strategies should be in place that will seamlessly implement your wishes regarding future income, ownership, control, gifting, taxes, inheritances, and more.

These plans can take years to develop and may need adjusting over time, so let's start a conversation now to make sure your estate plan includes all of the components that you need and desire as a business owner.