A business owner's estate plan should address two separate questions: who controls operations when the owner cannot, and who ultimately receives or buys the economic interest. Entity documents, buy-sell obligations, estate documents, insurance, financing, and tax planning must point to a workable result.
Map legal ownership and operational control
Gather formation records, bylaws or operating agreement, ownership ledger, shareholder or member agreements, buy-sell terms, financing covenants, licenses, leases, payroll authority, online accounts, and key contracts. Identify who can act under each document.
Test incapacity and death separately
A power of attorney, trustee, executor, surviving owner, manager, or board may have different authority at different times. Determine who can sign, access cash, make payroll, communicate with staff and customers, and approve a sale or transfer.
Create an executable transition
A succession plan needs evidence, people, and funding.
- Current valuation method
- Buy-sell triggers and payment terms
- Key-person and purchase-funding insurance
- Successor management and advisory roles
- Tax and liquidity analysis
- Secure inventory of critical systems and professional contacts