Tips for Modern Estate Planning for Small Business Owners

Understanding Modern Estate Planning for Business Owners

For many small business owners, family and business life is intertwined.

Where one starts and the other ends often overlaps. This is often the case with personal Modern Estate Planning and Small Business Modern Estate Planning. Here are 4 critical steps to help Business Owners understand their Modern Estate Planning responsibilities to their business.

Step 1 – All businesses need a backup plan

All business owners need a continuation plan for their business in case the Owner or Director is unable to continue to make business decisions, due to an unexpected sickness, injury or absence.

Modern Estate Planning for Business is really about understanding which business structures are seen as one-and-the-same with the business owner, and which business structures are seen as separate-and-distinct from the business owner.

Step 2 – Understand when you can appoint another to act on your behalf

When a business owner is a Sole Trader or part of a general Partnership, their personal control of the business can usually be exercised by others if needed through the use of a Power of Attorney or a Power of Enduring Guardianship.

Step 3 – Understand when you cannot appoint another to act on your behalf

When a business owner is a Director of a Company, the power of a company Directorship cannot be exercised by others or transferred or 'gifted' by a Will, a personal Power of Attorney or Power of Guardianship.

A separate Company Power of Attorney needs to be put in place by the Company to appoint another person (or company) to act on behalf of its Director, if they are unable to continue to make company decisions due to an unexpected sickness, injury or absence.

Step 4 – Company Directors must take action now

A company Director should have the company appoint someone to act on its behalf through a Company Power of Attorney to sign documents and manage the continuity of company affairs.

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