In the process of forming a new company, there are plans to be made and questions to be asked. What?… Where?… Who?… How?… The one question you least want to think about begins with an “if”.
If something were to happen to you suddenly, do you have a plan and systems in place to ensure your business will carry on until you return? Or a plan to ensure the business continues under someone else’s leadership if you cannot return? “Having a plan to ensure you can extract the value of your business for your family is important,” David Grau, Jr. of the Succession Resource Group stresses to financial planners. That plan should be communicated to all the key stakeholders – your clients, your staff, your CPA, your attorney,” he urges.
“As a business owner, an essential aspect of creating your estate plan is to prepare for a potential disability,” California attorney,James Roberts urges, explaining that corporate documents such as the corporation by-laws or shareholder agreements need to have provisions for the disability of owners and key employees. At Rebecca W. Geyer & Associates, we call it setting up your business for success, with the process including buy-sell agreements, succession plans, employment contracts, and provisions for disability.. .
“It is important to understand that the value of your business may continue to grow between the time you plan your estate and when you pass away,” Fidelity reminds business owners. At a minimum, there needs to be a business succession plan, including plans for:
- developing and training successors
- appointing outside directors/advisors
- having a compensation plan for both family and non-family employees
- using life and disability insurance to provide the money for successors to purchase the business
At Geyer Law, where we help business owners protect their assets, their families, and their employees, we know that to create a solid foundation for a business, major risks must be insured. Disability insurance will be part of the plan in several ways, including: buy-sell agreements, employment contracts, and succession planning.
We help savvy business owners think about – and plan for – the unthinkable!
– by Rebecca W. Geyer