Whether you are a sole proprietor, run a family business or co-own a company with partners, you may need an estate plan that includes a succession plan for your California business. The documents and structure that you need will vary based on your type of business and your personal situation, but they may include some of the following.
Wills and powers of attorney
Standard estate planning documents might include a will as well as financial and medical powers of attorney that appoint people to make financial and medical decisions on your behalf. You may also want a living will that specifies your wishes for medical care at the end of your life. If there are digital elements to your business, you may need documents that allow people to access them.
Succession planning
You can create a succession plan that addresses what will happen to your business in case you become incapacitated, retire or die. This may need to include a plan for training successors and managing employees. In addition to life and disability insurance, you may want to consider key person insurance that names your business as the beneficiary. This can help with any business expenses during the transition. You might also want to consider a revocable trust, which can help with tax issues and also allow you to name a trustee who will take over the business.
An attorney may be able to help you determine what documents are appropriate in your particular situation. Working with an attorney to prepare your estate planning documents might also help reduce the likelihood that legal terms will be used incorrectly or that elements of the plan will be confusing or ambiguous. You should review your personal and business-related estate planning documents regularly in case changes in your personal life, your assets, your company or laws mean that a revision is needed.