Succession Planning in Virginia
Business owners can work with an estate planner and a transactional attorney to begin estate planning and to prepare for succession planning in Virginia. On the estate planning side, it is important to ensure that an estate plan has been created in conjunction, and in coordination, of the operating agreement for the buy-sell agreement firm placed for the business. On the succession side, it is often important for the business owner to identify and train managers, or other potential owners, so that in the event of the business owner’s death – the business can continue. This can be particularly difficult when a business owner is the sole owner of a business. It can be difficult to continue the business operation unless there are employees or other individuals familiar with how the business operates. It can be a complicated process, talk to a skilled Virginia business planning lawyer for more information.
What is Business Succession Planning in Virginia?
Business succession planning is planning for a business to continue after the death or incapacity of an individual business owner. One of the ways that business owners can work towards preparing a succession plan is to make sure that their personal estate plan and the business plan have been reviewed in coordination and are completed to create one comprehensive plan that covers both the individual business owner’s personal estate and how the assets or business will continue to function after they pass.
Partnership agreements, corporate by-laws, and buy-sell agreements can affect the value of the business as an asset, and its availability to continue as an asset for a business owner’s family. Reviewing all of the business agreements in conjunction with the individual owner’s estate plan is important to ensure the preservation of the asset.
Importance of Business Succession Planning in Virginia
Business succession planning is not necessarily outlined in the decedents’ last will and testament. Usually, a business succession plan is a plan to keep the business running after the individual’s death. What is necessary is that a person’s last will and testament address a business as an asset or at least contemplate the business as an asset. For example, if the majority of an individual’s estate is a business or an individual owns a majority share in a business and the individual leaves their estate to six beneficiaries, then it is important to think that those beneficiaries now split the majority share of a business, making them all owners of a company who may or may not have a say in the operation of the company, but knowing that the split of the shares or the interests may result in another partner becoming the majority owner. A business plan must be carefully thought out throughout the estate planning process and the plan must be coordinated so that an individual’s interest is protected, but also that the business interest is protected as well, and can continue on after the death of the business owner.
Succession Planning in Virginia and Probate
The ownership of a business will determine if the asset is subject to probate or not. If the interest is in the decedent’s sole name then it may pass through the probate process. If a business’ interests is held in a trust of some sort or has a joint owner, then it might not pass through the probate process. A business is an asset of the estate, just like any other asset of the estate, and how it will pass at death is determined by how it was owned during the lifetime of the business owner.
A business owner can use estate planning and business succession planning in Virginia so that the business is taken care of after the business owner’s death.
Hiring a Virginia Business Planning Lawyer
At any time after an individual dies, especially when the individual is a business owner, it is helpful to hire a probate attorney quickly after the individual passes away. Because a business interest or business often needs to continue to run as an asset, and some of the assets can be protected, it is important to start the probate as soon as possible so that somebody is appointed who can then step in and keep the business running.