What Yogi Berra Can Teach Small Business Owners About Estate Planning

According to baseball legend Yogi Berra, "If you do not know where you are going, you will probably end up somewhere." Yogi&39;s linings often make me laugh, but they also make me think. His memo reminds me of the importance of having a plan during any business that will impact our personal situations beyond the immediate, here and now. This includes the estate planning process. Now, I concede to you that Yogi probably did not think about estate planning when he offered that particular slice of wisdom. Nevertheless, his words are absolutely relevant to the extent that it is important to plan for that day for which we will not live. As important as having an estate plan is for all of us, it is even more important for the small business owner. I think it&39;s no exaggeration to say that thoughtful estate planning is an essential part of the overall business plan of every small business owner.

I think of a successful small business owner as someone who recognizes the opportunity to provide a needed product or service and then invests time, dedication and energy in developing and implementing a plan to capture this opportunity. I admire these thoughtful risk takers who harness their vision, business acumen and business acumen to create, nurture and guide a sustainable business. I&39;ve found that the small business owners I advise are thoughtful, thoughtful, and attentive to the details of how they manage the management work of their businesses; that is to say, that they plan for the future . However, what I&39;ve also found from time to time among conservative and successful small business owners is the lack of a plan for their business when they die or are otherwise not not available to manage it.

It is easy to understand how even successful small business owners who are consummate planners might prefer to avoid estate planning with respect to their business activities. In at least one respect, these successful business owners are very much like most people; that is to say that they are not used (or inclined) to think about their own mortality. It&39;s a subject, even though it&39;s not fraught with anxiety, that lends itself easily to postponing the exam for "another day". Yet the persistent reality remains that none of us will come out alive from this life. Yogi&39;s thoughtful advice is worthy of reflection and action for the owner of a small business.

If you are a small business owner and have not started the estate planning process yet, let me suggest some relatively easy first steps to get you started. First, find the organization and management records for your organization, and then review them. If your company is incorporated, these include the bylaws, shareholders, shareholders. agreements and other documents that your lawyers have written at the start of the business. If your company is a limited liability company or a partnership, you would like to consult the company&39;s operating or partnership agreement. Review these documents with the following questions in mind:

– How will your death (or your permanent disability) affect the existence of the company?

– How will your successor be chosen, by whom and how much do you currently have in this decision?

– Will your death trigger a buy / sell provision under which a co-owner, or the company itself, is allowed to buy your stake in the business, despite the wishes of the members of the company? your family?

A brief review or discussion of these issues with your lawyer may inspire you to begin thinking about your vision of the future of society when you can no longer guide it. The next step might be to determine how you would like the business to operate in the event of temporary incapacity or unavailability. A durable power of attorney will allow you (as "principal") to appoint another person (the "agent") to make business decisions during your incapacity, while allowing you to retain the ability to withdraw or revoke the power of attorney when you are ready to take back control of the company.

The POA itself can be the genesis of a complete succession plan, which allows you to develop a plan to reduce your own involvement in the business and allow others to take on greater responsibilities in the future. management and decision-making. An orderly transition plan can increase your chances of survival when you leave. And such a plan can help you "let go" of control and devote more effort to mentoring those who will eventually run the business you have created.

In the end, you will want to focus your planning on what you want to do for your business after your death. In this case, a well-designed trust agreement will give you a lot of flexibility, both to keep some control alive and to identify your intentions with the business after your death. The trust agreement allows you to choose who will administer your intentions when you leave. For example, you can plan the sale and / or dissolution of the business over time or its eventual transfer to one or more family members. A trust agreement provides the owner with great flexibility and makes it an extremely useful tool in the estate plan of the business owner.

The bottom line is that you, as a small business owner, have the opportunity to make sure that, with careful planning, the company you created will survive your death. It is a process that can be approached gradually. However, given the uncertainties of life, the estate planning process should become a component of your overall business plan. There is no time like the present to begin this process. Do not be fooled by this task "for another day". None of us knows how much future we will have. Or, as Yogi says, "It may be late earlier than expected."

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