Estate planning and business succession planning have many similarities. A central aim of both is to ensure your most prized possessions are in the best hands after relinquishing control.
A sometimes-overlooked function of these two types of plans is the ability to continue business operations if you become incapacitated. Incapacitation occurs when you are no longer able to make important decisions and is often the result of a serious illness or injury. Whether incapacitation is permanent or temporary, having the right contingency plan for your business is crucial for its long-term success.
What is a Power of Attorney?
A power of attorney is a legal arrangement and estate planning tool. Someone who creates a power of attorney gives someone else, called the agent, legal authority to perform certain actions on behalf of the principal. People often create these arrangements if they are traveling outside the country for an extended period of time, for instance.
There are a few power-of-attorney types. One allows agents to make healthcare-related decisions on behalf of principals, for example. A business power of attorney empowers agents to conduct certain business operations on behalf of principals. A key feature of powers of attorney in Florida is the ability for principals to give agents only the responsibilities principals want them to have.
Duties of an agent for a business power of attorney might include:
- Signing paychecks
- Paying bills
- Maintaining required records
- Representing the company in legal proceedings
- Entering into contracts
Keep in mind that a business power of attorney is obligated to act on behalf of the company itself and not necessarily your own interests. An estate planning attorney can help you set up crucial legal documents to ensure your personal property is accounted for if you are incapacitated.
Who Should You Select as Your Agent?
Choosing someone to name as your agent in a business power of attorney arrangement is similar to selecting your successor. The best candidate will likely be someone you trust with proven business discernment and knowledge of your company.
However, let’s say you become incapacitated tomorrow due to an unfortunate car accident. You might have a successor in mind right now, but would that person be ready to immediately take the company’s reins? If not, you might choose someone who can hit the ground running but is not interested in doing the job long-term.
To illustrate that point, let’s consider a professional sports team that fired its coach mid-season. It will usually promote a long-time assistant to carry the team through the rest of the season. Then, when the dust settles, management will usually begin interviewing for the next full-time coach.
Protect Your Business with a Florida Business Attorney
Pondering your business without you at the helm may not be fun to think about, but making a plan is important if you want your loved ones to enjoy the fruits of your labor for years to come. We understand the significance of creating an unshakeable legal foundation for your company and will work tirelessly to help you achieve your goals. Get in touch with our firm soon to see how we can help.
Bryant Taylor
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