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San Franciso estate planning attorneyStarting your own company and being your own boss can be a dream come true for many people. However, being a business owner is a major responsibility. Before embarking on this type of endeavor, it is crucial that you understand business law and also prepare for the future. Although some individuals may not like to think about it, there will eventually come a time when you are no longer on this Earth. Planning ahead ensures your wishes are carried out in the event of your death or if you become incapacitated during your lifetime. Even if you have a family businesses that goes back several generations, it is essential that you set up a plan for transition. A business succession plan is a legally binding document that outlines who receives ownership of your company. A skilled estate planning attorney can help you create this important legal document.  

Protecting Your Interests

A business succession plan gives you control in determining what happens to your company, such as an agreeable price for the business. It may also eliminate the need for a business valuation upon your death. In addition, it can designate the steps for determining how the value will be determined upon either death or retirement from the business and how those funds will be paid. Life insurance may be included in the plan, which means the full policy benefits can be instantly accessible so the funds can be used to pay for your part of the business. This will help protect the business from being sold as a way to cover your interest costs. A will or a trust may also be used to designate how a business will be transferred from owner to owner. Regardless of the transfer method, it is critical that any successor has the proper training, preparation, and access to any documentation or records in order to operate the business successfully after you are gone. 

In some cases, your business partner(s) may purchase your share of the business after you pass away. Selling the business upon your death may be an attractive option since it can provide for your family, and they do not have the responsibility of running the business. Selling to a trusted individual or organization can give you a peace of mind that the business will continue and thrive, as opposed to having a stranger take it over.

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