Pennsylvania entrepreneurs might want to put some thought into the disposition of their business ownership interests after they die. Simple steps taken now can be of great benefit to those who wish to continue to nurture their business and their family after their demise.
A will and a durable general power of attorney are excellent places to begin. The will sets out the general shape of the entrepreneur's wishes, emphasizing who they want to benefit from the business and what kind of management of their enterprise they expect. A durable power of attorney grants the power of administration to a second party in the event that the owner becomes incapacitated. The latter document ensures that important daily operations can still be carried out without delay. A buy-sell agreement is also important for businesses with multiple owners, as provisions must be made for disposition of the interest in the case of death.
However, these legal protections might sometimes be insufficient. For example, a will may be unsuitable for those who own a business based on trade secrets. This is because a will is a public document, so everything that is contained within it will be made public knowledge during the probate process. Living trusts are an excellent tool to protect the privacy and confidential information of a business, and they can also contain more specific guidance for the future actions of the business than a last will and testament might be able to.
Just as a business plan provides a road map for a company's future, a proper estate plan can help to ensure that a company's progress is not impeded by an owner's death or incapacity. An attorney can be helpful in tailoring these types of documents to the needs of a client and the company that the client owns.
Source: Business, "5 Estate Planning Tips for Entrepreneurs", Fred Cohen, Nov. 8, 2016