3 Tips to Ensure Your Business Can Survive Your Death. —Gatehouse News Service

Plan for Death, Disability, and a Partner Wanting Out.  Here’s Why.   

John P. Napolitano,  CEO of U.S. Wealth Management in Braintree, Mass., and 2012 president of the Financial Planning Association of Massachusetts, explains why it’s critical to think about the future, even if you’re overwhelmed with work today:

No one lives forever, but in theory, a business organized as a corporation or LLC could survive beyond your lifetime. This is one area that business owners frequently ignore until there is a problem.

The first pitfall is either not having a written succession plan or having one that is so old that it is ineffective. A succession plan should involve all stakeholders. That may include family and surviving dependents, partners, clients or customers and employees.

For partners, make sure there is a written agreement that covers succession for a few contingencies. The first would be not waking up for breakfast. The death of an owner with no succession plan invites battles with remaining shareholders and family.

The second contingency would be the disability – temporary or permanent – of an owner, either a temporary or permanent one. In many ways, this could be more harmful to the business than the death of a shareholder.

The last contingency would be a partner wanting out of the business.

Napolitano also details the importance of having in place a solid valuation, funding for a buyout, and insurance policies.  Read the whole piece here. 

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Part of Today’s Work Should Be Planning for Tomorrow’s Retirement—and for Unexpected Contingencies.