Despite what so many people think, estate planning isn’t just about securing personal assets for loved ones. If you’re a business owner, estate planning can have profound implications for you, especially when considering how to protect your business during a time when you wouldn’t be able to step in and do so yourself. Without a solid estate plan in place that accounts for several possible scenarios, the business you’ve worked so hard to build over your lifetime can take on intense losses should you ever be incapacitated or pass on unexpectedly.
Understanding the ramifications of various tools available to you via estate planning—such as power of attorney, robust succession planning, and other powerful strategies—is an essential first step to fortifying and securing your business well into the future. More than this, seeking the help and guidance of an estate planning lawyer will help to shape the plan that best suits your specific needs.
Legacy Law Centers, with offices in Leesburg, VA, and Nashville, TN, prepared this article to serve to spur you on as you begin to think through the future of your business and these pressing issues. In it, we’ll discuss several key issues that business owners should carefully consider to ensure their business remains resilient and secure, regardless of any challenges that may arise along the way.
Understanding The Legal Implications Of Power Of Attorney
Power of attorney is a critical aspect of estate planning. You may have heard the term used in a popular movie or television program and like many others do not know what it actually entails. A power of attorney is a legal document that grants someone else authority to manage your business and its affairs should you become incapacitated. This individual is someone you yourself select.
Why are powers of attorney so vital to securing any semblance of continuity for your business? Well, should you be incapacitated, you wouldn’t be able to communicate any decisions you’d still be able to make. With a power of attorney, your designated agent would be empowered to make said decisions on your behalf, ranging from financial transactions to signing contracts and even managing day-to-day operations in some situations. Not having an agent working on your behalf exposes your business, leaving it in a considerably vulnerable position, crippled by there not being anyone at the helm.
Not only could an estate planning attorney help you draft up a power of attorney, but they could also help you select the perfect agent if you’re paralyzed and overwhelmed at the idea of making such a massive decision with no experience ever doing so before.
The Importance Of Succession Planning
Succession planning is another vital aspect of estate planning for business owners. As the terminology suggests, it involves preparing for the transition of your business to a successor. Successors can in essence be anyone, ranging from a:
- Family member
- Business partner
- Third party
Not having a succession plan exposes your business to considerable risk, namely uncertainty and potential conflicts, should your heirs or partners have conflicting interests, ideas, or desires about the direction things should move in, especially if they lack clarity and guidance from you.
Many small business owners opt for a family member to be their successor. This is a perfectly fine route to take, but in some instances, it may require preparing the family member to be able to step into the position when the time comes and ensure the transition goes smoothly. A great way to achieve this is by giving them more responsibility over time, as well as setting up relevant legal structures to facilitate the transfer.
When setting up a succession plan, an estate planning attorney could help construct one that aligns with your needs, wishes, and long-term goals for your business. They’ll be sure to address key concerns such as who will take over the business, precisely how ownership will be transferred, and how your business will be valued and divided among your heirs, if necessary.
Plan Today
On your own, estate planning for your business is complicated, but with the help of a skilled and reliable estate planning attorney, things are much more manageable. The benefits of working with one to develop a thorough plan that protects your business and provides for your loved ones will far outweigh the short-term costs and inconvenience of reaching out to an attorney to begin your planning.
If you are a business owner in Leesburg, VA, or Nashville, TN, email or call Sam Mansoor of Legacy Law Centers at (571) 260-0827 for answers to questions or help getting your estate planning started.
Start Planning Today!
(571) 260-0827
