What happens when you die?
I can’t answer the spiritual question, but I can answer the legal question.
If you’ve done no estate planning, then New York State law will determine who takes possession of your assets, including your business.
Some things pass automatically through life insurance proceeds, or as the designated beneficiary of certain deposit accounts or other financial accounts. But the rest will pass according to the rules on intestacy. Whether you want it to or not.
Special Considerations for Business Owners
As a business owner, you can protect this source of income for your family so that if something happens to you, they are not left in a lurch. Entering into buy-sell agreements that cover death, disability, bankruptcy, divorce, disagreement and the like are excellent forms of business protection. It allows you – when things are good – to make decisions about the disposition of your entity to protect yourself, your family and your legacy.
A part of your planning will be a business succession plan. This document will detail the structure of your business going forward. A succession plan can eliminate family disputes over how the business should be operated or whether it should be sold after you’re gone. Your business succession plan will address the systematic transfer of the management and ownership of your company.
In addition to working on corporate documents to protect your interests, all business owners should have an estate plan. This means putting a health care proxy, power of attorney and will in place. For those business owners with minor children, this is particularly important as you want to be able to provide for your children’s welfare should something befall you.
To Learn More
We can help you coordinate your succession plan with your estate plan. And read our white paper entitled, "Succession Planning and the Closely Held Business: How to Make the Sale and Enjoy Your Second Act."
Francine E. Love is the Founder & Managing Attorney at LOVE LAW FIRM PLLC which dedicates its practice to serving entrepreneurs, start-ups and small businesses. The opinions expressed are those of the author. This article is for general information purposes and is not intended to be and should not be taken as legal advice.