Advisor continuity and succession planning has been written about and talked about ad nauseam, but I would say justifiably so. It is a critical industry-wide issue that warrants industry-wide action. Yet each and every advisor’s individual situation is unique and requires individualized attention to the nitty-gritty details. One such detail is the advisor’s corporate form (or lack thereof), and an understanding of how it has the potential to completely muck up even the best-laid plans.
To be clear, this article is focused on continuity planning as opposed to succession planning; i.e., planning for an advisor’s unexpected disability, incapacitation, or death as opposed to a designed exit strategy while the advisor is still alive. The tragic but all-too-common scenario is an advisor that has spent a lifetime building his or her business and then passes away without the legal mechanisms in place to continue the business’ legal existence and transfer its value to heirs without going through probate.