Estate planning is beneficial for people in all kinds of careers and family situations. Some testators establishing estate plans need more robust plans than others. A business owner has high-value assets to address. They also need to consider the continuation of business operations should anything happen to that.
Someone who inherited, purchased or founded a company likely understands that they need to choose someone to inherit the company when they die. What they may fail to consider is that they may very well need to have a plan in place to ensure continued operations in an emergency. Illness or injury could render them incapable of performing their job for an indefinite amount of time.
Powers of attorney can help protect a business
A business owner often wears many different hats. They issue paychecks to workers and negotiate arrangements with vendors. They pay business expenses and sign contracts with clients. When they are unable to communicate with others or operate the business due to medical issues, the company’s future could be at risk.
A business owner can protect against collection activities that endanger business assets or company insolvency by creating living documents before they have an emergency. Powers of attorney can transfer the authority that the owner has to another trusted individual in the event of an emergency.
It is possible to craft the documents in such a way that they limit access to company resources and allow the agent or attorney-in-fact to perform specific functions on behalf of the business owner. They could issue checks to pay vendors and landlords and manage payroll but may not necessarily have the authority to make decisions that affect the company’s long-term operations.
Business owners may need to consider creating a trust as well to protect their business from creditor activity or dissolution after their death. They may also want to establish a succession plan to ensure the right person takes over their role. There are many tools that can help preserve the organization and establish a meaningful legacy for the owner after their passing.
A thorough estate plan that includes living and testamentary documents can help a business owner to better ensure that the organization they run continues to function even if something happens to them. Drafting or updating estate planning documents can be a smart undertaking for those who own and operate a successful business.
