Those putting together an estate plan in Ohio often have specific priorities. Many people worry about meeting the needs of dependent or vulnerable family members. Others focus on their assets or their ties to the local community.
If someone creating an estate plan owns a small business or a professional practice, that company could very well be one of their top estate planning priorities. Their business could be worth as much or even more than the home where they live. They may also be a source of personal pride, as they have hired numerous workers or had a positive impact on the local community.
A business owner putting together or reviewing an estate plan might need to address certain business considerations in their documents, including the three common business-related concerns noted below.
Succession planning
If someone hopes that their business continues operating after they retire or die, they need to plan to have someone take over their position. Succession planning involves identifying characteristics that make someone a good candidate for a leadership role or selecting specific people to take over a leadership position in the future. A succession plan typically means to outline requirements for someone’s replacement and also provide guidance about the job functions that they must complete. Succession plans can help ensure that the next generation of management takes over seamlessly when someone leaves their job.
Incapacity planning
This need dovetails with succession planning. Someone with a thorough succession plan can trust that a competent individual could step into their role if they become incapacitated. Still, it could take some time to arrange for someone to formally take over an owner’s role at a company. They may want to create an incapacity plan. Documents including powers of attorney can help ensure there is someone to step up when they suddenly become incapable of running the business, making medical decisions or managing their personal finances.
Addressing ownership matters
The person chosen to run the business may not necessarily have an ownership interest in it. Someone who owns all or most of a company may want to request their interest in the organization to family members or other specific beneficiaries. There are numerous ways to achieve this goal ranging from gifts made before someone dies to the inclusion of someone’s business interest in their will. Some people even create trusts to help ensure proper joint ownership of the business among numerous beneficiaries and to exert influence over the company’s management after their passing.
Adding the right terms to an estate plan can give a business owner peace of mind and can help protect the organization they want regardless of what happens to them.