Business owners need to plan better for their successions, finds a survey by TD.

One-third of owners have a succession plan. Many of those who don’t have a plan say they want their children to take over one day, but they haven’t talked it over with them.

Read:  7 succession planning tips for biz owners

TD says advisors can help business owners prepare for succession by:

1.      Listing goals and priorities. At what age does your client want to hand over the reins? How important is it to have someone in your client’s family take over the business vs. selling it? Don’t forget to include your client’s family in these discussions.

2.      Assembling a team of specialist advisors. Beyond financial advisors, lawyers and accountants, consider adding a family facilitator to help your client navigate the details of a family business succession plan and preserve family harmony.

3.       Review succession plan action items. Make a list of things you or your client need to do to make the plan work. For instance, training a successor, changing the business structure from sole proprietorship or partnership to corporation, or whether your client needs an estate equalization plan to ensure the interests of other family members who don’t enter the business are considered.

And advisors need succession plans too, even if their business partners will take over, Melissa Shin writes.

To make sure the process runs smoothly, create a partnership agreement that enumerates exit, transition, valuation and payment terms. We spoke with two advisory teams (see “The examples”) and found out how they structured their succession plans.

Read more here.

Also read:

How to buy out your partner

Succession planning can boost business

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