The most successful businesses face challenges when an owner passes away, particularly if a succession plan is not in place. Proactive steps can make a significant difference in the stability and future of a company. Proper planning with the help of an attorney can give everyone involved with a business peace of mind.
Tampa lawyer Mary L. Greenwood McDermott is a skilled estate planning attorney who will take the time necessary to draft and execute a succession plan that helps a business outlive its owner.
THE PITFALLS OF FAILING TO PLAN
If a business owner dies without business succession planning, relatives receive the stake in the company or shareholders absorb the stake.
In some cases, a relative who played a vital role in the family-owned business’ daily operations faces an uncertain future because their role in daily operations was not documented. With larger corporations, the death of a business owner is felt throughout the organization. Uncertainty sets in, as a once-stable business seems unstable. Replacement management, sometimes in the form of relatives, may lack the skills in operating the business, particularly during the instability.
In either scenario, valuable businesses run the risk of losing value.
THE BENEFITS OF SUCCESSION PLANNING
With the goal of a smooth transition, the first step in proper succession planning is consulting with everyone involved in the business, from employees to shareholders. The future of the company is outlined with attention to every detail. Key elements include:
- Retention planning — Ensuring that the business or shares are kept within the family after the death of the owner
- Buy-sell retention planning — Shareholders and important employees receive a larger stake in the company upon the death of the owner
In addition to designating shareholders, well-drafted succession plans provide specific procedures to follow.
CONTACT BRANDON FAMILY LAW CENTER, LLC
For an initial consultation to discuss your case at the Florida-based Brandon Family Law Center, LLC, call us at 813-653-1744 . You can also reach us through our intake form.
