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Protection through Succession Planning

Recently, regulators have been considering a requirement that investment advisers and brokers create and maintain succession plans for their business. A similar requirement already exists for disaster recovery – a plan to allow operation of a business when conditions, such as hurricane, fire, flooding and the like, make it impossible to use the “usual” business location. A succession plan is designed to allow for continued operation of the business where the ultimate disaster – from your standpoint – occurs: death or disability.

The parallel to our own lives and financial planning seems clear. We spend a lot of effort creating a financial plan and setting goals and ways to hopefully meet them. But many folks overlook the larger picture that does not include them, but may well include others who they would want to provide for at least to some extent in their absence or inability to act. Should not we also consider succession planning not so much for ourselves but for the benefit of our families and loved ones?

The conversation is often one we do not really want to have. Considering one’s own demise is not a pleasant occupation and may also prove painful and uncomfortable for others whose death or disability we are not considering. However, if we do engage in some form of succession planning (much of which is closely related if not identical to estate planning) then we can see a number of benefits. There is the benefit of considering the needs and situations of family members and loved ones and making provision for them; the benefit of relieving our loved ones from the burden of decisions we can make now; the benefit to us of knowing that we have made such provisions and that we have some control over what we want to do for our loved ones; and, the benefit of planning now when we can do something about it and not when time is short or has run out.

So if succession planning is a wise requirement for a business, so we can protect the customers of the business and keep things running, then it seems logical that our own succession is an issue worth considering. Talk with your financial adviser, your attorney, your pastor, or other trusted person and think about that succession plan!


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