As a business owner, an essential aspect of creating your estate plan is to prepare for a potential disability. This is especially important if you are the primary person in charge of the day-to-day operations of the company. If you become disabled, someone must be able to step in and take control of your affairs. Any time that is lost could be financially devastating to the overall health of the business.
Five Steps for Planning for Disability as a Business Owner
Fortunately, proper estate planning can effectively prepare your business in the event of your disability. If you own a business in Orange County or elsewhere in California, you should strongly consider taking the following steps:
- Consult with a knowledgeable estate planning attorney. Business interests must be dealt with very carefully when it comes to your estate plan.
- Consider incorporating provisions into your living trust that allow your trustee to step in and take control over the management of the business.
- Consider incorporating provisions into your living trust that appoint a specific individual to step in and take control over the management of the business.
- Depending on the entity type of the business that you own, consider incorporating provisions within the corporate documents that address your potential disability. This may include by-laws of a corporation, a shareholder agreement, or an operating agreement.
- Consider incorporating provisions within your durable power of attorney to allow your attorney in fact the ability to manage your business affairs in the event of your disability.
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