Business Succession Planning for Delano Business Owners

Start with the ownership picture

Before discussing what should happen to a business interest, identify what the interest is and how it is held. That ownership inventory gives the planning conversation a concrete starting point: the plan can only address the property and ownership arrangement you can identify.

Gather records that show the business interest and its current ownership. If there are several interests or assets connected to the business, list them separately rather than treating the business as one undifferentiated item. Note any uncertainty about the records so it can be discussed rather than resolved by assumption.

• List the business or entity and the interest you own, using the description in the available records.
• Record how the interest is held and identify the document or record that reflects that ownership.
• Gather relevant governing documents and existing estate-planning and financial decision-making documents.
• Mark information that is missing, outdated or inconsistent for discussion.

Map the documents and the people expected to act

Estate planning can coordinate a will, trust, financial decision-making documents and asset ownership. For a business owner, the practical question is whether the documents and ownership records tell a coherent story about what should happen if the owner cannot act or dies.

Make a simple list of the people you expect to take on responsibilities, and what you expect each person to do. This is preparation for a discussion, not a conclusion that a person has legal authority. Bring the governing documents as well as the estate-planning documents so the proposed plan can be considered alongside the arrangements that already exist.

• Who do you expect to make financial decisions if you cannot act?
• Who do you expect to manage, receive or otherwise be involved with the business interest after death?
• Are those expectations reflected consistently in the documents and ownership records you have?
• What would you want to happen if a person you have in mind is unavailable or unwilling?

Prepare for a focused remote consultation

For a useful first conversation, organize the material by topic rather than sending an unlabelled collection of files. A brief summary can identify the business interest, how it is held, the documents you have, and the decisions you want to explore. You can also note questions about how the estate plan and governing documents fit together.

If you do not have a document or do not know how an interest is held, say so in your summary. The gap itself is useful information; do not fill it with a guess. Keep copies of the records you gather so you can refer to them during the conversation.

• Create a one-page ownership list and attach the records that support it.
• Collect current wills, trusts and financial decision-making documents, if any, along with relevant business governing documents.
• Write down the outcome you hope to plan for and the unresolved questions you want to address.
• Identify which facts are confirmed and which still need clarification.

Keep the planning conversation within its limits

Coordinating estate-planning documents and asset ownership can help organize a plan, but gathering documents does not itself settle how a business interest should be transferred or managed. The appropriate discussion depends on the ownership information and the documents involved.

This planning conversation is not a substitute for business valuation, tax-return preparation, a corporate transaction or business litigation. If your questions involve those matters, identify them separately so the next step can be considered without treating an estate plan as an answer to every business issue.