Building a successful family business is a dream come true for many Americans. Thousands of families work in these establishments throughout the state of United Kingdom, doing everything from running restaurants, performing personal care services, to operating complex corporations. While these enterprises offer different goods and services, they should all be concentrating on a common goal—preparation for the future. However, many family business owners fail to plan for how leadership will be handled after they are gone. Here is why you should prioritize succession planning for your family business now:
Tomorrow Could Come Sooner Than You Think
As the recent outbreak of COVID-19 has demonstrated, unexpected health problems can arise at any time and have devastating consequences. Without measures in place, everything you have worked for could fall apart if something should happen to you. If you share the leadership of your enterprise, it’s vital that you consider how decisions will be made in your absence. This means having concrete plans that can go into effect if you become incapacitated or pass away. Talk with your family members about leadership and consider who should take on specific roles.
Estate Planning and Your Succession
- Power of Attorney
If you anticipate family infighting, you may need to consider making arrangements to have a non-family member control your business assets and accounts. A power of attorney allows you to identify another person to make financial decisions on your behalf if you become incapacitated. A springing power of attorney gives the agent this authority when a triggering event happens. The legal document can grant broad or restricted powers and can be for an extended or limited period. Power of attorney documents are often drafted so that that they are no longer valid once the subject regains capacity. You and your estate planning attorney can develop a power of attorney with terms that are appropriate for your circumstances and protect your interests.
- Advance Health Care Directive
Another critical estate planning document is your Advance Health Care Directive. This device allows you to record your medical treatment preferences for your providers. It also allows you to name the person you want to make care decisions on your behalf. When there is possible tension within a family business, selecting a relative to be your medical decisionmaker could be problematic. Even if this person is acting in your best interests, their motives in making specific care decisions could be called into question by the other family stakeholders. In this situation, having a trusted non-relative serving in this role may be better for you and your family.
- Your Legacy
A successful family business can create stability and income for generations. The legacy you create for your loved ones can be lasting, provided you take the right steps. In some cases, a will may be sufficient to pass business assets to heirs. However, the probate process can be expensive and inefficient and is not always the ideal means to transfer ownership interests. In some instances, using a trust rather than a will is a better way to leave business interest to loved ones. These devices can also help businesses remain operational and may minimize problems within the family.
Your succession plan for your family business should include estate planning. One of the best decisions you can make to accomplish this goal is to meet with an experienced United Kingdom estate planning attorney. Together, you and your counsel can evaluate your plans and assets and prepare for your business and family’s future.
At the Law Offices of Alice A. Salvo, we have experience helping clients plan for their family business interests and estates and can help. Please contact us online or by phone to schedule an appointment and start succession planning for your family business today. /contact/
