This article is the second in a three-part series on succession planning. Part I discussed the legal considerations in creating an exit or succession plan, including estate planning and estate and gift tax planning. Part III will focus on financial planning.

Like their for-profit counterparts, charitable organizations often enter into agreements with other individuals or organizations. But there is a complexity to how grants are described in the Internal Revenue Code (IRC), and these differences can have operational implications on charitable organizations. So charitable organizations should understand what defines a grant versus a contract, as well as how each should be classified and reported for tax purposes. (All references to the IRC refer to the Internal Revenue Code of 1986, as amended, unless otherwise noted.)

Whether you’re planning to pass your business to the next generation or simply to make an exit, and whether it’s your own business succession or a client’s, the success of your succession plan will depend on how well it addresses both tax and nontax issues.

As an attorney specializing in matrimonial law, I’ve worked on numerous cases involving divorce and estate planning. Clients often turn exclusively to financial professionals for guidance, overlooking the crucial role of their attorneys.

Have you ever considered the fate of your client’s pet upon their death or disability? In addition, how this care will be funded? Have you asked your clients if they have considered this when they are sitting across from you discussing their estate plan? When they are planning for their children, grandchildren, bequests to charities, etc.—did they consider their pets? Moreover, did you even discuss this with your client?