If you own a business, ask yourself this question: What would happen to my business if I could no longer work? Fortunately, there are ways to protect a business from an owner’s potential incapacity. The best way is to develop plans before incapacity strikes.
Legal documents usually are prepared when forming a business. The number and type of documents varies depending on the type of entity that is being established. For example, a corporation usually requires more formation documents than a sole proprietorship.
While going through the steps to set up a business, take time to address the possible incapacity of one or more owners.
Business owners could consider transferring their business interest to a revocable living trust. Acting as trustee, the owner retains control of the business. In the event the owner is no longer able to manage the business, due to either disability/incapacity or death, a successor trustee would take over.
While still healthy, the business owner could train family members or key employees to take over the company if necessary. This option, however, still needs a legal mechanism to work. A durable power of attorney could name an agent to take over business operations if the business owner is no longer able to do so.
Business succession and incapacity planning are often handled through an individual’s estate plan. Consult with an experienced attorney to learn which strategies are viable options for your situation.
Attorney John Mangan is board certified in Wills, Trusts & Estates by the Florida Bar. Please call us at 772-324-9050 or use our Contact Form to set up an appointment. We help clients throughout Florida, including Stuart, Palm City, Hobe Sound, Jupiter, and Port St. Lucie.