Estate Planning Blog

Ask a Sacramento Business Planning Lawyer: What Happens to My Business If I Die?

September 27, 2012

Business planning lawyers in Sacramento are often asked “What happens to a business when the owner dies”, and the answer has a lot to do with you and the way your business operates. As the person who keeps everything running now, it’s pretty much your responsibility to make sure that it continues to do so (or does not) once you are no longer in charge.

A Sacramento business planning lawyer’s job is to help you determine several important considerations or desires, and then create the paperwork that ensures that your wishes are known. He or she will likely walk you through a series of questions regarding the nature of your operation, partnership agreements, valuation issues and questions about potential successors. The important thing is to consider them all so that you can devise a plan that will work and will protect your business and those who are involved in it.

To Be or Not to Be

Probably the most important question your Sacramento business lawyer will ask is whether or not you think the business should continue without you. In many cases, the entrepreneur “is” the business, and it doesn’t make a lot of sense for it to continue after you’re gone. This might be true if you provide a service on a contract basis, for example. On the other hand, you may feel that there is someone who could and should step in and take over where you leave off. Perhaps this is someone who works for you or a colleague in the same field whom you think would be able to add your client list to theirs.

Of course, you also need to ensure that the person in question is willing and able to take on the business. It may be assumed that your eldest child will take over a family-run store, for example, but he or she may have radically different plans. It’s better to know this up front so that you can find an eager person to take on the role and the responsibility of maintaining what you’ve worked so hard to grow.

Transferring a Business

There are different ways to transfer your business to another person in Sacramento, and this is one area where a knowledgeable business planning lawyer is indispensable. He or she will help you to determine what route you want to take, as well as what needs to happen legally in order for your wishes to be met. In some cases, the process may be fairly simple, with a partner just taking over your interests. In other cases, however, that same partner may be expected to pay your heirs for your portion of the business. Having this all spelled out in advance can save considerable effort and frustration later.

As you can see, money doesn’t always have to change hands when it comes to transferring a business to someone else. It really boils down to you working with your attorney to decide what really makes the most sense. The size of the business, number of people involved, and so many other factors play an important part in determining its future, and the very best way to approach the topic is with a seasoned Sacramento business planning lawyer on your side.

Call The Chubb Law Firm today at (916) 241-9661 to review your goals and discuss your options.

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My wife, Sue and I really appreciate the concern and care Heather took in doing our estate planning. It has given us peace of mind. Heather keeps us informed of the latest changes in the laws that we might want to consider. We highly recommend her and the Chubb Law Firm.
Ray

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