One essential part of estate planning is determining what is to be done with your business should you be unable to maintain control. A business succession plan may prepare for scenarios such as unexpected death, incapacity due to illness or injury, or even a planned retirement. These plans can also function alongside other testamentary documents. For example, a business succession plan may work in tandem with a Will to distribute a person’s stake in a business upon their death. They may also work as a way to avoid the state’s intestacy laws in the event of a sudden death.
However, these considerations and preparations are best made with the help of a skilled attorney. The role of a Wake Forest business succession planning lawyer is to identify your business holdings, determine what will happen to them in various scenarios, and help craft legal documents to achieve your goals for the future.
Whether the company is a sole proprietorship, a partnership, or a large corporation, an individual’s stake in that business is an asset that may pass to their estate. Having a business succession plan allows people to retain control over this process and determine what will happen to these assets.
One function of effective planning is to avoid the state’s laws concerning intestacy. These go into effect when a person dies without a Will or other testamentary documents. According to North Carolina General Statutes § 29-15, if a person dies without a Will, their estate may be divided among their surviving spouse and children. Clearly, this can have a devastating impact on the continuing operations of a business.
Additionally, having a business succession plan can also help in the event of a sudden incapacity. Without a pre-established plan, the company may suffer from a lack of leadership. In this scenario, the role of a business succession planning is to help craft a plan for company leadership should an individual become incapacitated due to illness or injury. This could include nominating an heir to take control, ordering the sale of the business, or even providing instructions to boards of directors.
One function of a business succession plan is to prepare for involuntary loss of control over a company. However, many people also use these plans for considering their retirement. For those who want their company to continue operations after they leave, these plans can include a specific date when a person will relinquish control. A local business succession attorney could work with people to identify their retirement goals and memorialize them on paper.
There is no law in North Carolina that indicates specific requirements for these documents. However, clearly stating one’s wishes and intentions is crucial to ensure that these documents are effective. A business succession planning lawyer in the area could help craft clear and concise documents that carry legal weight.
Having an effective and clear business succession plan is essential to secure the future of your company. These plans can provide instructions for ongoing operations in the event of your death or incapacity. They may also serve as a way for you to retire while still dictating what you want to happen to the business.
To learn more about the role of a Wake Forest business succession planning lawyer, reach out to our firm today. Our attorneys can work to understand your goals, explain the relevant laws, and craft documents that help you to retain control over your company.