Did you know that the closing of businesses over the past two years has caused an avalanche of deprivation in neighborhoods, from job loss to communities eroding?
What if business owners knew how to rebuild their communities and become sustainable?
Isn't it time to help people create stability and embrace hope today so they can leave a legacy of wealth for their families and communities tomorrow?
Many business owners are barely surviving, yet they can begin thriving if they take the time to do one thing, says attorney Portia Wood. She helps black, Latinx and LGBTQ families protect, leverage, and pass on wealth to future generations through culturally competent estate planning.
“Every business needs a succession plan,” Portia says. “What happens to your business and the health of your business if something happens to you? Is it set up in such a way that it runs automatically, or does it require your particular skill set?”
Having a succession plan is crucial for entrepreneurs and business owners who want to pass wealth to future generations and leave a positive legacy for their communities, Portia says. I had a chance to interview her to learn more.
Why is it important for businesses to understand and invest in the communities they serve?
“Because the communities they serve invest in them. It is a symbiotic and mutually beneficial relationship. When your community is healthy and thriving, you likely can see that represented in the businesses because members of the community are patronizing those businesses.”
Why does a business need a succession plan, and what does a business need to consider to create one?
“Everybody needs a succession plan, but businesses in particular need to know what happens when the leadership is gone. Typically the founders are the stewards; they're the most passionate about their business — both what they do and the clients they serve. If they do not have a clear succession plan, then there can be turmoil. There can be disruption. And what we find is that many businesses end up failing because they do not have a steward directive. And perhaps the kids aren't necessarily as invested or interested in taking over their parents' business. And so they sell it or they give it away, or it just sort of fails because they don't have that passion. Having a clear succession plan, such as a buy-sell agreement if you have partners, an estate plan, a management plan and key person insurance to make sure that there's funding and resources inside of the business to be able to seek out talent that can keep the business moving forward, is important. Without it, we see many mom and pop shops and even large businesses go out of business because of a lack of planning.”
Why is it important for businesses not to overlook online assets?
“In this modern global economy, where online assets are a big part of how we reach everybody, businesses must have a plan for who gets access to the Facebook page, who gets access to the community that we built online; if there is no clear succession plan for passwords, the next person who comes in will lose all of that online footprint, all that goodwill, and typically they will have to start over. We don't want businesses starting from scratch just because there was no plan. Online assets are gold. They are your social capital.”
Why is it particularly important for women of color to have plans in place and to find support?
“Because we are starting businesses and graduating from higher education at higher rates than really anybody else in the country. We are accumulating assets and we need to make sure that we have a plan in place for what happens with those. We typically are the stewards of our families. So if we don’t have a plan, everything we hold together is at stake.
“Between April 2020 and June 2021, 146,000 children were orphaned as a result of COVID-19; 65% of them were from minority communities. We have to create estate plans that protect our minor children. So all women, all mothers, all parents, need to make sure that they have plans in place for what happens to their kids if something happens to them.”
About: Portia M. Wood, Esq., is a generational wealth planning attorney. Operating in Maryland, DC, Virginia, and California, Wood Legal Group, LLP is an African American woman-owned law firm specializing in estate planning, probate, and elder law. Portia runs the firm with her mother and law partner, Robin Wood. They are passionately focused on helping all families grow and protect wealth by being a trusted resource for accurate information and comprehensive, culturally competent estate planning. Learn more at woodlegalgroup.com.
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