It is always good to create a succession plan for any business. Whether you want to leave your business to family, a friend, an employee, or a yet unknown associate, in order for your business to continue after your death, you need to create a succession plan. The terms in your operating agreement or shareholders agreement identifies future leaders for your company and sets forth the actions people should take if something happens to you, whether you become incapacitated, want to retire, or die.
You may hope to pass down your business to future children or grandchildren; but your children might not want to take over your business – or might not be able to do it. Creating a succession plan is more than naming those who will take over your spot – it names and develops people to take over all major roles in your business.
Grooming an employee to take over someone’s spot – even your own – ensures that your customers will get the same treatment you and your employees give to your customers now. Creating a succession plan is more than choosing someone who is right for the job. You’ll have to work with the person to make sure he or she is familiar with the job and handles employees and customers in a manner that you approve of. Knowing how to do the job, and how to run the company, are two different skill sets.
While your business documents should ultimately have provisions for continuation, management, or dissolution of your business if you are unable to manage it yourself, assigning your interest in your business to a Trust can help prevent transition problems and act as a failsafe if you should become incapacitated. When set up properly, a trust allows your trustee to take over your affairs, including your business, until you recover. A trust can also help you avoid probate, which could prevent you from running the business as it should be run.
If you have a small business, contact our Georgia estate law attorneys at Grissom Law, LLC to discuss business documents and an estate plan that benefits your business.
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