Establishing an estate plan should be a top priority for everyone, but one is especially important for a business owner. Your estate plan does not just determine where your personal assets will go, but it can also be used to ensure that your business is properly passed on once you have passed away. A Rockland County wills, trusts & estates attorney can help you with this.
Can a Business Owner Choose a Successor in Their Estate Plan?
Yes, it’s actually pretty easy for a business owner to choose their successor and outline their plans in their estate plan. You can choose who you want to inherit the business and give all of the necessary details about when and how they should take over. You can also organize all of the necessary documents, plans, and other information that your successor would need to keep your business running smoothly.
It is also possible to designate a backup successor. If your chosen successor cannot or does not want to take over, then having a backup can be a wise idea. It could certainly reduce fighting amongst loved ones who may have an interest in the business.
What if the Heirs of a Business Owner Do Not Want to Own the Company?
Alternatively, your succession plan could just not include a successor from your family at all. Your plan could be to sell the business once you pass away. This is a good option if you do not think that anyone in your family would want to take over the business after you are gone. Maybe your children have their own careers firmly established and could benefit more from the money that the sale of the business would create.
Another good option is including a buy-sell agreement in your estate plan. If your business has multiple owners, this gives them the chance to purchase your shares of the business once you pass away. This means that your family would not have to continue running the business if they do not want to, and they would get a fair amount of money for their stake in the business.
What if a Business Owner Passes Away Without an Estate Plan?
Passing away without an estate plan can mean that your personal and business assets need to be passed down in accordance with intestate succession laws. In some cases, your business could cease to operate upon your death. Your relatives would have to argue for it to continue in probate court and could end up dealing with a variety of legal headaches.
Talk to Our Estate Planning Lawyers
Whether you are a business owner or not, we cannot emphasize just how important it is to have a legally binding estate plan. So if you have not established one already, contact the Lauterbach Law Firm and schedule an appointment with our legal experts. We are ready to assist you.
