If you own a business, it’s just as important to plan for the company’s future as it is your own. Otherwise, without the combination of personal and professional estate planning, you could leave behind a mess for your loved ones when you get sick or pass away.
Personal planning is at the cornerstone of any business planning. While these strategies are separate, they can also work together if something happens to you. Talk to your estate planning lawyer about tools like trusts, powers of attorney, and wills to help protect your interests.
Most people who own a family business have no intention of letting the company die with them. They anticipate someone in the family stepping up, but there’s usually no documented plan of when and how that will happen. Consequently, these business owners expose their companies to risk due to the possibility of illness or death.
Business Incapacity Planning
A far less anticipated problem in a North Carolina family-owned business is a sudden exit or temporary setback due to an illness. In these cases, the business owner might be unable to physically perform their expected duties or mentally unable to make decisions.
While everyone hopes this doesn’t happen to them, any sudden accident or illness can introduce this situation to their family company. If you hunted for an “estate planning lawyer near me” well in advance of this situation, you should already have a plan in place to address those issues. If not, your family might be left scrambling while your business flounders if you need to step away from the company for an extended period.
You’ll want to have documents that allow for the transfer of decision-making for your health and financial issues if something happens to you. But your family-owned business needs a contingency plan, too. The global pandemic showed us just how quickly plans can change, and it’s valuable to have that in the back of your mind as you think about anything that could affect you or your other key employees.
First, consider who could step in to handle your role if you were unable to do so for some time. Is another person trained on the same systems and software you use? Have you left good documentation of your regular activities so that another person could step in?
Second, consider how short or long-term these backup plans should be. You might only need someone to cover the basics and keep things afloat for a few weeks out of the office. But what if a critical employee required long-term care or was critically injured in an accident and remained unable to perform physical labor for months? Your incapacity plan must include the possibility of when you decide to replace someone, even temporarily.
Business Succession Planning Basics for NC Company Owners
Although most business owners know that there will come a time in the future where they need to make plans to exit their company, most assume it’s so far off it’s not worth thinking about today.
The truth is that this process, known as business succession planning, can take a long time to orchestrate. That’s especially true in family businesses, where there is no guarantee that your children or other relatives will step into your place or that the transition period will be seamless.
For that reason, you want to secure the help of an experienced lawyer. Searching for an “estate planning lawyer near me” is the first step to finding answers to these questions. Whether or not you have a plan in place, you need the assistance of a lawyer to determine the details of your succession plan. A sudden departure from the business, due to anything like death, divorce, or changing goals, can have ripple effects all across the company.
Strategic documents like buy-sell agreements and life insurance policies help to provide options for unexpected situations. When all stakeholders, such as partners, company owners, or key employees, have agreed to this well in advance, it’s much easier to decide a course of action following the departure of a vital player in the business.
A good business succession plan doesn’t just set up guardrails for an owner passing away. It also incorporates the concept of retirement and the type of training or additional employees required for business continuity purposes. Planning allows everyone to express their wishes and understand a roadmap for who will take over in certain positions when an owner or other leader leaves. It also minimizes the possibility of conflict and legal disputes down the road.
Set up a meeting today, no matter the current state of your business succession plan. Talking things over with a lawyer will help you see the gaps in your plan and to help you determine your next steps.
Secure Your Family’s and Your Business’s Future with Carolina Family Estate Planning
At Carolina Family Estate Planning, we help families build better lives by planning for a secure future via estate planning, asset protection, and long-term care planning. If you have questions about business succession planning, we’re here to help you get your ducks in a row.
Need a business succession planning attorney in Wake County, NC? Schedule a needs assessment call at 919-443-3035 or complete our online form to set up a vision meeting with a member of our experienced, caring, and dedicated legal team at Carolina Family Estate Planning to discuss your estate planning goals.
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