Los Angeles (and the rest of the country) is filled with entrepreneurs and business owners. If you're young, you've probably never thought about this, but what happens to your business if you pass away or lose the capacity to work? This is where business succession planning comes into place.
If you run a business, it is probably worth creating some sort of business entity for the purpose of operating it. For example, if you have (or are growing!) a real estate empire, it may be worth utilizing one or more LLCs to hold those interests. In addition to potential liability protection, the government documents for the business entity, whether it is an LLC, corporation, or some other form of business entity, can provide details about how profits are to be split (if you have more than 1 partner), as well as provide a plan for who will manage the business in the event a partner passes away or is not able to actively participate in the business.
Intersection With Estate Planning
As part of the estate planning process, the estate planning lawyer may discuss:
- Forming a business entity to hold your business(es) and drafting the appropriate LLC Operating Agreement, Partnership Agreement, Corporate Bylaws or Shareholders' Agreement.
- Assigning your interest in the business entity to your revocable living trust.
- Assigning all or a portion of your interest in the business to others, including family or other associates.
Planning for your business can help to ensure that your family and other business partners are able to maximize the value of the business and that the business remains productive long after you pass away. It can also be a good tool to teach younger generations how the business works and instill in them values that may be of importance to you.