Most people who have a family business have not gone to business or law school to learn all of the rules. If you are not careful with your family business than you might be making legal mistakes that will harm your business in the future. One mistake that many small business owners make is failing to make a succession plan for the business as part of their estate plan.
When you pass away, something needs to be done with the business. Even if you and your family want the business to end when you pass away, your estate plan should appoint someone to wrap up the business’ affairs. If you want the business to survive you, then you need to make more arrangements. The most important thing you can do is to appoint someone to be in charge after you pass away. Ideally, this person should gradually take on more authority while you are still around as that makes a smoother transition for everyone else. You also need to make sure that you have the proper legal framework in place for your successor to take over. The person you want to assume control may not be able to if you have not provided a legal framework for him or her to do so.
Owning a small business requires care in operating it, but the responsibility does not stop there. You also need to make sure to talk to a lawyer about what will happen to the business when you pass away.
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