By now, it is common knowledge that we have lost Prince, one of the greatest artists of our time. Though he is gone, his legacy will live on in his music, movies, and various other distributions of his image and art. Unfortunately, Prince had no will. According to various estimates, Prince’s net worth at the time of his death was roughly 300 million with an additional 100 million expected in the next five years alone from fans that will continue to purchase the late singer’s songs and other memorabilia in his honor. And if this is indeed true, this may be one of the worst business succession failures in recent memory in the music industry. It just takes a second to recognize that Prince’s impact on society was far greater than just his music. There were literally hundreds of thousands of tweets, articles and blog posts reflecting the impact Prince made upon them. In short, Prince was an iconic brand that conducted business at his compound known as Paisley Park Studios just outside of Minneapolis. Without having a will that established who will control his iconic brand, Prince essentially was running a multi-million dollar business without succession planning.
So why then do you want to have continuity succession planning in place? There are many considerations to take into account and in no particular order they are: mortality, tax planning, life changes or events to just name a few.
Mortality. The only certainty in this world is that no one is getting out of here alive. What will happen to your business when you are gone? This can be a very emotional question and likely the biggest reason why people do not have estate plans. People don’t like to talk or even think about their own death. However, if you don’t deal with it, your survivors under the laws of intestate succession will be the ones running your business. Think about how much effort you placed into getting your business going. How hard you worked to create that brand and what it stands for. Do you want your brothers and sisters or children running the show? What about your business partners? The people with whom you share your personal and professional life may not be suited or capable of successfully working together and picking up the pieces after you did not plan carefully enough. Truth be told, if you have partners (fellow shareholders), then they are also partly to blame here. While they are not responsible for your estate plan, they are equally responsible for not having a business succession agreement in place. More on this agreement later.