One of my memories from childhood is watching my mother build and run her own business. I saw first hand how she lived the job, how seriously she took her responsibilities to her customers and employees, and how she never really stopped thinking about work. It was what she had to do to make the business successful. At the time, I didn’t always enjoy sitting at dinner and listening to my parents discuss the store finances or how to deal with a problem employee; however, I now realize that I was learning by just listening and it has helped inform my approach to working with small business owners and understanding what it takes to establish and maintain a successful business. I know how hard small business owners work. There can be so much focus on building the business and running it day to day that people often forget to address what happens when they no longer want to keep it going or can no longer work at the same pace. I don’t mean what happens when a business fails. What happens when a business succeeds? How do you transition it to the next owner? How do you protect the legacy you’ve worked hard to build?
Businesses come in all shapes and sizes. Business owners are even more unique; no one business is exactly the same as another. In his article The Year of Teamwork, Matt Landis highlighted how working with a team can be utilized to best meet a client’s needs. When I meet with clients to discuss their personal estate planning needs, I always ask about any business interests they might have. It does not matter the size of the business or its level of profitability. If you own a business or a portion of a business, that must be factored into your estate plan. Based on the type of business you own or are part of, I might include simple clauses in the Will to ensure continued operation at your death and or allow for quick liquidation, or I might consult with one of my colleagues in our business practice group to review the Operating Agreement to ensure the transfer you envision in your Will is allowed by the controlling documents of the business. Considering slowly transferring ownership of the business to your children or key employees? An attorney in our business practice group and I will work together to make sure all of your documents work together. Have an accountant and financial advisor you’ve trusted for years? We will work with them to not only ensure your documents work together, but that you are receiving the best tax benefit as well.
I’ve seen businesses grind to a halt when an owner unexpectedly dies and hasn’t made proper provisions to allow the business to keep running. Basic things like making payroll can require court intervention when proper precautions are not taken. I’ve seen people try to transfer ownership to a child through a Will, for the child to find out that transfer wasn’t allowed in the Operating Agreement. You have put a lot of time and effort into building and running your business, take the time to discuss your business with a qualified attorney who is willing to work with other professionals to make sure your needs are being met in the best possible way.