As the Day of the Dead approaches, it is a time that business owners need to be thinking about what will happen to their businesses if something happens to them. Without the proper planning, everything you dreamed and built for your family can crumble as quickly as a row of dominos. Proper planning helps ensure that your family can be supported and that your business can continue to provide for them when you are gone.
All business owners need to have an estate plan. When you are discussing your estate plan with a professional estate planner, you need to make sure they know that you have a business. The estate planner will need to know what type of business you have (i.e. LLC, corporation, sole proprietorship, etc) and how the interest in the business is titled. If you co-own the business with someone else, the estate planner will want to know if you hold the interest in the business individually or if it is as joint tenants with rights of survivorship. Depending on how the interest in the business is titled, your estate will deal with the interest differently.
When you are coming up with your estate plan for your business, there are a lot of questions you will need to ask yourself. Who is going to take over the business, if anyone? If you have a business such as a law firm, it may be that no one in your family can take it over unless a family member is a licensed attorney. Even if you have someone in your family that can take over your business, you may find that no one wants to. You want to make sure that your business is a gift to your family members and not a burden.
If you do have someone that wants to take it over, or even just need someone to take it over in order to dissolve or sell it, you need to make sure that person has a basic understanding of how the business is run. Where do you bank? Who are your vendors? Who are your main accounts with? Do you have employees? Who does your taxes? These are just some of the questions that you want to make sure that there are answers to.
When you have a business, it can be rewarding. However, just as you plan for the day to day growth of your business, you must also plan on what will happen if something happens to you. If you have any questions about running a business or need information about business estate planning, please call me, your Denver business attorney, Elizabeth Lewis, at 720-258-6647.