Attorneys from all different practice areas went through law school to get where they are today. It’s no wonder everybody that knows or works with an attorney thinks they can slip in questions about unrelated practices whenever they get the chance. But, we’re here to tell you something we wish everybody knew: not every attorney has answers to every single legal matter.
Attorneys specialize in certain practices for a reason. To be transparent, at Bryant Taylor Law we’re a team of business law attorneys who focus on business formation, partnership disputes, and business succession planning. We are not estate planning or tax attorneys, but the work we do can fill in some of the holes that those practices won’t cover for you. We can’t help you put together your estate plan just the same as estate planning attorneys won’t always understand the ins and outs of LLCs and business structures. If your estate plan fails to account for an LLC you’re a part of then your estate plan will be incomplete, potentially leaving your hard work in limbo.
Estate planning is an important part of making sure your loved ones are taken care of when you’re gone and that includes making sure your business succession plan is in place to fill any gaps down the line. In our last blog, we talked about how a business’ Operating Agreement can play a role in that succession plan, but we want to dive deeper into what that agreement can and can’t do for your estate.
Operating Agreements can’t pass on business ownership
An Operating Agreement is imperative to protect your investments and the partners managing those investments. One key aspect of a thorough Operating Agreement is a succession plan for what happens when the business and asset owner either dies or is otherwise unable to continue as owner.
However, the agreement will not legally transfer ownership to the chosen individual(s) at that time. Instead, your agreement can simply establish the management between the point of your death/incapacitation and the certification of new ownership defined in your estate plan.
Bridge the gap
Estates will generally take at least several months to sort through and finalize after your death. Some with larger assets and equity can even take YEARS. Whether it’s months or years, this can be an eternity for businesses with ongoing needs.
A business attorney can make sure that your company has the necessary management for the time between your death and the time that your estate plan is finalized. Your estate plan and Operating Agreement can actually have the same or different people designated to manage and take over your business. At the end of the day, who manages your business while your plans are sorted out does not need to be the same person that you’ve chosen to inherit the business.
What’s important to add is that whoever you designate to manage the business during this period can later be removed from the company entirely by the person you’ve chosen to inherit it. If you want to prevent this, it’s important to make sure you either choose the same individual for both roles or that the two individuals are on the same page.
At Bryant Taylor Law, we want to make sure your business’ future is in the right hands. We can take a look at your plans with you and ensure your Operating Agreement and other business documents are working hand-in-hand. Contact our team to make sure your plans are all in order and working together.
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- The Role of a Business Attorney in Estate Planning - October 13, 2022
