If you own a small business, you need an estate plan to help you prepare for a time when you cannot make decisions about the business and your personal life. Many small business owners are constantly putting out fires and have not taken the time to think about the future. To keep your business strong no matter what, make an estate plan.
Help with Business Succession
Part of your estate plan should include a business succession plan. This is your roadmap for who will take over the business if you cannot run it any longer. You may not be able to run your business for a variety of reasons, including an emergency, serious health issues, or even death. Your plan should include training of employees to perform vital business functions like payroll, selection of someone to perform your usual tasks, placing important documents in a central location, and more.
If you have business partners, you may need a lawyer’s help to create an agreement for what will happen if one of you dies or gives up your interest in the business. Or this may be part of your partnership agreement already.
Your Heirs and Your Business
Some small business owners plan to leave their business interest to a family member or friend. If you want to do this, make sure your estate planning documents properly indicate the interest you are giving and who will receive it. This would be listed in a will or in some other estate planning device. Speak to an estate planning lawyer to help you prepare the proper documents.
You should talk to your business partners about your plan to leave your business interest to a family member. Not all business partners will want to work with an inexperienced family member, and they might want to negotiate a buyout of your interest.
Your Personal Estate Planning
Since you own a small business, you should consider signing a durable power of attorney. This document authorizes another person to take various actions for you, even if you are incapacitated. You can customize your power of attorney so that the agent only takes over in certain circumstances.
Small business owners find powers of attorney helpful because they assign someone to pay the bills, make payroll, or resolve customer problems when they cannot do so. The agent also can take care of personal affairs such as depositing money in bank accounts, paying utility bills, and more. Without a power of attorney, both your business and personal interests could be adversely affected while you are incapacitated.
Planning your estate? Angela Klenk, Esq. and the team at Beach Cities Estate Law couple personalized attention to your estate plan with big law firm experience for a winning combination to give you peace of mind. To schedule a case evaluation, visit Beach Cities Estate Law online or call Angela’s office at (424) 400-2125.