A person’s business holdings are as much a part of their estate as any other possession. As a result, a will that fails to address your business assets may lead to the court applying the state’s intestacy laws to your company’s future. In addition, incidents may arise that leave you suddenly unable to retain control over your company. Illnesses or injuries could force an early retirement or leave you without control of your faculties. In these situations, it is essential to have a plan that provides for the future of your business.
A Rosemead business succession planning lawyer could help you to retain control in case of either of these scenarios. A business succession plan could protect your standing at your company, make arrangements that may be necessary in an emergency, and consider your future retirement. Our skilled estate planning attorneys could help you draft a plan that meets all of your goals, so you do not have to worry about the future of your business.
Role and Importance of a Business Succession Plan
It can be helpful to imagine a business succession plan as being another example of a testamentary document. Whereas a will describes a person’s wishes for their personal property after their death, a business succession plan can serve a similar role concerning the future of a company.
For example, a business succession plan allows an entrepreneur to name a specific person to take control of their sole proprietorship after their death. In other situations, a plan may provide instructions for a board of directors to sell the business. Alternatively, these documents could require the sale of a company with all profits going to nominated beneficiaries.
It is essential to remember that business holdings are assets under state law. This means that if a plan does not exist, the probate court may consider a person to be intestate concerning these assets. California Probate Code § 6401 & 6402 contain the state’s intestacy laws which describe what actions a court may take in the event that a valid will does not cover business or other assets. Leaving these important decisions in the hands of the court could lead to any number of things happening to your business. A Rosemead attorney could help someone with business succession planning by drafting a document that meets their wishes and goals for the future of their company.
Common Topics in Business Succession Plans
There are two main reasons to create business succession plans. The most common is to serve as a testamentary document that considers a person’s eventual death. Here, the plan can dictate a transfer of shares to another party, order the sale of those shares with the proceeds distributed to heirs, or require the dissolution of a company or other business entity.
Similarly, these plans can provide instructions for what should be done if a business owner is still alive but incapacitated. The other main function of a business succession plan can be to plan a person’s eventual retirement. These plans can mandate the same sale, dissolution, or transfer. However, they differ in that they name a specific point in the future when these terms will go into effect. Much like in a will, these plans have no legal impact until this named point in time. A Rosemead lawyer could help individuals identify their needs and draft a business succession plan that gives those plans a legal effect.
Speak with a Rosemead Business Succession Planning Attorney
Many people work their entire lives to build a profitable business. However, a quick accident or sudden illness could be all that is necessary for these companies to fall into chaos. Having a comprehensive business succession plan is vital for any person looking to protect their company’s future.
A Rosemead business succession planning lawyer could work with you to form these plans. They may function similarly to wills when they take effect after your death, work as a safeguard against sudden incapacity, or work to provide instructions that contemplate your retirement. Contact an attorney from our office today to learn more about what our team could do for you.