When you are thinking of succession planning, your plan must include a transition in the event of your incapacity. Not only will you need to think of death, but you must also be prepared for pre-incapacity transition and post-incapacity transition of your business.
Business planning comes via many avenues listed below:
- Trustee steps into your shoes following your resignation, but before you are incapacitated.
- Your business documents, partnership agreements, buy-sell agreements, your power of attorney and your trust must all coordinate with each other to allow the right person to act for you.
- You and your partners or shareholders must discuss who will operate the business in the event of your incapacity, and how the incapacitated partner or shareholder will be compensated if he or she is no longer working in the business.
Who will be in charge of your business when you are incapacitated?
Here are your choices:
- Your business partner.
- Your spouse;
- Your child/ children;
- Your agent under a power of attorney;
- Your trustee.
- A professional fiduciary.
- A court-appointed conservator.
Will a Conservator be the right choice to run your business?
A conservator is bonded and court-supervised. A professional conservator will report to the court in an accounting which can be viewed by all of your family members and your business partner. A bond protects your estate from the actions of the conservator in Los Angeles.
Each of the choices above has different procedures, risks and costs. While some are less formal, the less formal the arrangement, the riskier the arrangement is, where there is no bond for the person acting for you. Family members often have their own agenda. For example, your spouse may be interested more in payment of her current expenses as opposed to acting in a way that benefits the business as a whole. He or she may also not have the tools or business training to make your business thrive. Your children may be influenced by their spouses, and may have internal conflicts to deal with when it comes to their siblings.
Talking about succession planning and fiduciaries such as conservators with a Los Angeles attorney can help draw a picture of the future for you and allow you to best plan for it.
Call Mina Sirkin, Succession Planning attorney representing fiduciaries, trustees and business people in incapacity planning in Los Angeles. Call 818,-340.4479. Email: Info@SirkinLaw.com.