by Tabitha L. Atwell
Every day, business owners are working on their businesses. They want their business to grow and succeed. Many owners believe that their families will take care of their businesses if something were to happen, but that isn’t always true. Many family-owned businesses do not survive after time passes and future generations are in charge. While it is important for business owners to take care of the day-to-day operations, it is also critical to plan for the what ifs of life, more particularly death and incapacity, and how that may impact your business.
What happens if you will be in the hospital for an extended stay and your business needs to pay its employees or sign a contract for a vendor? Who is best suited to make these decisions on behalf of a business owner? As a society, we do not like to discuss the possibility of losing control of our own decisions. However, failing to carefully plan could leave the decisions in the hands of someone you would never have considered and who knows nothing about the day-to-day affairs of the business. In a worst-case scenario when there is no planning, the courts may need to get involved in the operation of the business.
Do you need to appoint family members or others to positions in the business now in order that they might have authority to take actions in your absence? Are trusted family or employees included with signature authority on business bank accounts and other assets, or do you have a durable power of attorney that will grant someone else the ability to take actions for the business on your behalf?
It is important to note that depending on how your business is set up, your business partner may not have the right or ability to make business decisions on your behalf. Your spouse and children may not know how to keep the business running or may not want to run the business in your absence. Is the business owner the good will ambassador for the company? What happens when that person is not participating in the business and customers become concerned? These are all issues that a business owner needs to consider.
The hope is that no one will ever need to use your estate plan to keep your business running, but no one can predict what may happen one day to the next. As part of your estate plan, you should have information related to the succession of your business. By having this documented you, and not a court, can decide who is appropriate to manage your affairs, including your business.
Tabitha L. Atwell, estate planning and probate attorney with Danna McKitrick, P.C., focuses her practice on estate and tax planning, probate, and trust administration. Tabitha assists both families and individuals with proactively planning for incapacity, individuals with Alzheimer’s disease and other forms of dementia, and individuals with disabilities. Tabitha can be reached at 314.889.7185 or tatwell@dmfirm.com.