If you own a business, the last thing you want is for your hard work to be for naught. Have you given much thought to what you want to happen to your business when you die? Though it is a bit morbid, business succession planning is a must-do for any business owner. In this article, we will go through some of the most common, basic business succession planning FAQs.

1. What is business succession planning? 

Let’s start with a basic definition. Business succession planning is a series of both financial and logistical decisions about who you want to take over your business after you no longer run it. There are a lot of elements that go into a successful business succession plan, so it is best referred to as a conglomeration of important steps and documents. 

2. What are the common ways to transfer ownership? 

Some common ways to transfer ownership of your business include selling your shares to a co-owner or key employee. You can also sell your interests back to your company or to an entrepreneur outside the business. If you want, you can even keep it in the family by passing ownership interest to your heir/family member. 

3. Do you have to die for the plan to be put in place? 

Though we referenced death in the opening paragraph, you do not have to die for this plan to be put in place. You can retire or leave the company—all that matters is that you are no longer running the business. 

4. What is the first step? 

The first step of many is to determine a timeline. When do you want the succession to take place? Will it take place on a specific date or if you are disabled or die? After that, you can begin the work of picking your successor, formalizing SOPs, getting your business valuation, and more. 

5. What are some issues that companies face when succession planning? 

Deciding who to promote is often a huge issue when succession planning, along with maintaining the moral of the company. It is in your best interest to do a through evaluation of your proposed successor, as you want them to be someone who will keep company morale boosted. 

6. How do you decide who to promote, if you go that route? 

In reality, that decision is best left up to you. You should contact other people to see what they think, and our best advice is to just consider the issue really carefully. Determining leadership skills is not an easy task, and that is why this step of succession planning is often difficult for companies. 

7. What should the plan include? 

Each business succession plan is tailored to the particular company, but some major documents in the plan usually include a timeline, list of potential successors, Standard Operating Procedures (formalized), a valuation of your company, and details about how your succession will be funded. 

8. Should other people weigh in? 

It can be hard to know who to talk to during a succession. If you have people you rely on, don’t be afraid to ask them what they think. It is a weighty task to set up this sort of plan, and you don’t want to go it alone. Whether you tell your potential successor or not is up to you. Use your best judgment—if in doubt, hold off telling them until it is time. 

9. Can I change the plan?

Double-check with your lawyer just to make sure, but your succession plan can usually be updated, should you change your mind or have circumstances change. 

10. I’m confused. What do I do? 

This process can be confusing, and if you’re struggling, contact an attorney. They are best-suited to give you third-party legal advice and insight. 

Listed above are just some of the pertinent questions that business owners face when they are coming up with a succession plan. Above all, the most important step is number ten. Don’t be afraid to ask for help. Contacting an attorney will help shed light on the process, making it easier to maneuver. 

Valentine’s Day is coming up, and whether you have someone in your life or not, you still need to make sure your assets are protected. Let’s face it: love doesn’t always work out. In America, the divorce rate is far too high to go into a marriage unprotected. In this article, we’ll give you some tips for managing your assets in a clear, logical way outside of your love, whether lost or not.

Prenuptial Agreement 

Ah, the prenup. This vaunted document helps people avoid having their assets taken by their ex-spouse after a divorce. A prenuptial agreement, as the name suggests, is signed before the couple gets married. Couples list which assets they consider separate property versus those they consider marital (shared) property. 

If the marriage ends, the prenuptial agreement will help avoid disputes about property and money. If there is an asset that you want to keep as your own, like your house, list it in the prenuptial agreement. Word of advice: if your spouse-to-be refuses to sign it, you might be wise to take that as a red flag. 

Post-Divorce Estate Planning 

In some states, documents in your estate plan automatically are altered after your divorce is finalized. Whether they are or not, you still need to schedule an appointment with your estate planning attorney to go over documents to ensure they are updated. For example, you might have left possessions and money to your spouse in your will. After the divorce ends, you will want to change that. You’ll want to change any beneficiary names that list your ex-spouse in the blank space. Otherwise, you could find your future plans heavily-impacted. 

Incapacity Planning

This one is a little different. As financial scams are on the rise, incapacity planning has become more and more talked about. If your elderly parent or grandparent falls in love with a scammer across the globe and begins sending them thousands of dollars, do you have any legal recourse? Online romance scammers are rarely caught and prosecuted, despite law enforcement’s best efforts. 

The best advice that we can give you is to immediately contact a lawyer to see what your options are. If you are listed as the elderly relative’s power of attorney, talk to counsel to determine whether their actions may meet the threshold for you to take control. There’s no clear-cut answer—it all depends on the situation. But, if this sounds like a situation your relative has, unfortunately, found him or herself in, talk to a lawyer as soon as possible.

Exercise Good Judgment 

We couldn’t leave this article without a few words of advice. It’s hard, when you’re in love, to always think clearly. Exercising good judgment with regards to their finances is something that people tend to think of last when they’re in a relationship. Below are five red flags to look out for when it comes to finances in a relationship. Hopefully, you take note of them. 

Financial Red Flags 

1. Hiding financial information: if your partner hides information from you or lies to you about their finances, this is a huge sign to watch out for. 
2. Runaway debt: while everyone has debt, debt that comes from extravagant, nonsensical purchases could be a sign that your partner is not responsible with money. Someone with a spending problem is not a person you with whom you want to mingle accounts. 
3. Frequent borrowing from family: if your partner is always asking for money from mom or dad, that is a red flag to stay away from. That goes double if they rarely pay the money back. 
4. Financial control: on the flip side, if your partner tries to manage your money for you or cont
   rols what you can and cannot spend, he or she could be a financial abuser. Financial control is an enormous red flag. 
5. Consistent late bill payments: we’ve all been late on a bill a time or two. Maybe we missed the date, forgot, or had an emergency that made us short that month. It’s not a huge deal if a late bill payment happens rarely, but it is a bigger problem if your partner consistently falls behind on bills. 

Love can be complicated. We understand that not everything is clear-cut in a relationship, and it is easy to lose your head. If you think that you’ve lost control in a relationship and are in danger of asset loss, contact an attorney immediately to get the situation sorted. 

Well, the Super Bowl is upon us. In just a few short days, the Rams and the Bengals will battle it out to see who the top team in the NFL is. Everyone has placed their bets (whether literal or figurative), but the Super Bowl leads us to think about another question: how are we playing the game of life?

As with any athletic endeavor, it helps to be prepared. In life, preparation helps as well. Estate planning is a great legal tool for anyone trying to be as prepared as they can for all of life’s eventualities. If you have a solid estate plan, then you know that you are playing the game of life pretty well.

Estate Planning as a Preventative Measure

Essentially, estate planning helps you prepare in the even of your death. Estate planning manages an individual’s asset base after they die or are incapacitated. Estate plans often include bequests of assets to the deceased’s heirs, as well as the settlement of tax laws on the estate. The majority of estate plans are set up with an attorney who is well-versed in the intricacies of estate law where the individual lives. 

You can’t plan for death after you’re dead, so you have to set up your estate plan before the worst-case scenario occurs. In the game of life, minimizing the impact of major negative events is important for both you and your family. Here are some of those events listed below: 

Death

When you’re making your estate plan, gather up your important documents, along with your contact information. This will help you execute your last will and testament, a document that provides instruction for where you want your assets to go after you die. An attorney should help you prepare the will, as there are a lot of legal requirements and technicalities to which the document must conform, lest it be invalidated. 

Other documents that can prepare your assets for transfer include a living trust, which is a great way to avoid probate court. You should also arrange for your digital assets to be secured, should you own any, and you can even plan your final arrangements when you have an estate plan. All of these preparations help your assets be divided in the way you best see fit. 

Divorce 

For this negative event (or positive, depending on the situation), the work that you do in your estate plan can include removing your ex-spouse as your beneficiary and striking their name through all your legal documents. Though no one can really predict a divorce, you can act quickly to make sure that your former spouse isn’t entitled to anything in your estate plan. Often, meetings with divorce attorneys and meetings with estate attorneys go hand-in-hand.

Illness or Injury 

There are two important preparative documents to know before you suffer an illness or injury that leaves you incapacitated: power of attorney and an advance directive. This list is far from comprehensive, but these two are some of the most important. 

The power of attorney is a trusted individual that you appoint to manage your healthcare and financial affairs if you become incapacitated. Usually, the power of attorney is split between healthcare and finance—one person handles one task, while another handles the other. 

The living will, also known as an advance directive, is important for anyone with specific end-of-life wishes for their healthcare. The directive is a specific set of instructions that you lay out for doctors and nurses who are taking care of you. A common feature of this directive has to do with refusing resuscitation or something similar. Often, the contents of the directive are based in someone’s specific religious or personal views. 

Will Contests 

There is no surefire way to prevent someone from contesting a will, as you can’t control what other people do. However, you can keep that contest from being successful if your will is executed properly with the help of an attorney. A letter of intent can also be persuasive to a court when determining your will’s meaning. If squabbling over your will is something you foresee in your future, talk to a lawyer to safeguard the document as best you can.

These major events are all negative, but, with the right estate plan, they can be managed properly. Death, divorce, incapacitation, and will contests are all preventable with the help of a good estate planning attorney.