Business owners and those with significant company assets should consider making legal arrangements for this asset if they want to ensure that it retains its value in event of unexpected injuries or illnesses. Additionally, many do not realize that these assets are part of their estate that will go through probate if they unexpectedly pass without making proper arrangements. This could result in an uncontrolled splitting of assets or conflict between potential heirs as well as interruption in the operation of the business.
One way to provide for your heirs as well as protect your company in case of sudden death or illness is to create a business succession plan with the help of a knowledgeable trusts and estates attorney. A Tustin business succession planning lawyer could help you understand the purpose of these legal arrangements, explain how they interact with other estate planning documents, and draft them in a way that carries the intended legal effect.
What is the Purpose of a Business Succession Plan?
Effective estate planning requires people to take stock of all their assets. For many, this can include stocks, partnership interests, and even sole ownership of a business. While a standard will may declare what an individual wants to happen to their physical property or real estate, it may overlook the details concerning a person’s business holdings.
In this way, a business succession plan can serve as a supplement to a will. These plans can directly transfer assets to a beneficiary, order the forced sale of those assets, or provide instructions to the board of directors. It can be especially important to have a plan because of the state’s intestacy rules. California Probate Code § 6401 & 6402 outline which relatives will receive assets by default if a person does not have a comprehensive estate plan. A Tustin attorney could determine how a business succession plan could be a beneficial addition to an estate plan as a whole.
Immediate Benefits of a Business Succession Plan in Tustin
While a primary function of a business succession document can be as a part of a larger estate plan, it is also possible to reap the benefits of careful planning in the more immediate future. For instance, an effective plan can provide protection in the case of immediate uncertainty. If this comes about from a sudden injury or illness, business succession plans can provide instructions for what an incapacitated company owner wishes to occur. In the event that a business owner is no longer able to lead their company, they may wish to transfer these assets to another or sell the company.
It is also possible to use a business succession plan as a means to eventually retire in a scheduled and controlled manner. A Tustin lawyer could help individuals identify their goals and draft business succession plans that clearly demonstrate their intent.
Contact a Tustin Business Succession Planning Attorney
Owning shares of a company or any other business asset requires you to contemplate the future. In the long-term, this can include what will happen to these assets after your death. In the immediate future, this can include making preparations for a scheduled retirement or enacting contingencies in the event of illness or injury.
A Tustin business succession planning lawyer may be able to help in both these aspects. A member of our team could work with you to identify your goals, catalog your business assets, and draft legal documents that help you to retain control over future events. Reach out to the firm today to learn more about your options.
