If you've invested many years into building a profitable and meaningful business, you might wish to make sure your professional legacy continues after your passing. However, the death of an owner or core business partner can create a major crisis without a detailed succession plan.

So how would such a plan work, and does it matter what type of business entity you own? Learn the basics of business succession planning in Georgia.

What Happens to Businesses in Georgia After the Owner's Passing?

The legal consequences of your death for your business will depend on whether you operate your business as a sole proprietorship, or have formed a legal entity such as a LLC or corporation. Generally speaking:

• Sole proprietorships automatically cease operating with the owner's passing. The business property becomes part of the late owner's estate to be distributed through a will or trust, or the laws of intestate succession if the owner had no estate plan. 
• Corporations pass into the ownership of the decedent's estate unless other plans have been made such as having the shares of the corporation owned by a trust, or having the shares designated with beneficiary designations as may be allowed under state law and the corporation's governing documents with completion of the appropriate corporate documents.
• Limited liability companies (LLCs) and partnerships follow the terms of their operating agreement, a legal document that determines business policies after the owner's death.  For LLCs, as with corporations, the ownership interest (member interest) may be passed through beneficiary designations if allowed under state law and the appropriate LLC paperwork has been completed.  LLC interests can also usually be held in a trust as well.  

Why You Need a Solid Business Succession Plan

In some cases – for example, if the business is a one-man service or consultancy – preserving a business beyond the owner's death may be unrealistic. But often, when a business can operate without the owner's direct, continued involvement, the brand and business can continue thriving beyond the founder's lifetime with proper planning.

Business succession planning in Georgia is a must for every business owner who wants their company to survive beyond their death. A business succession plan can help:

• Avoid probate for business ownership and assets of the business
• Reduce taxes and other expenses for your heirs
• Ensure a smooth management and operation transition for the business

What a Business Succession Plan Should Include

An efficient business succession plan will keep your business viable, profitable, and well-organized even after your death or incapacitation. Such a plan should:

• Decide who steps into your shoes. Depending on your company's needs, you may want to pass leadership to a family member, a partner, or a co-owner.
• Outline training and management processes. A smart succession plan includes provisions for training your successor(s) and other key employees in the business.
• Grant proper authority. You'll want to make sure your successors have immediate access to business bank accounts, insurance company information, and other key instruments to keep the business running.

A skilled succession planning lawyer can suggest efficient strategies and documents for business succession, like operating agreements, buy-sell agreements, or transferring your business to a trust and appointing your chosen successor as the trustee who will assume business management upon your death.

Create an Efficient Business Succession Plan With Peach State Wills & Trusts

When you create a reliable business succession plan, you secure your company's future in events like your death, sudden disability, or retirement. An experienced estate and business lawyer can guide you through the steps of business succession planning in Georgia.

Protect your legacy and gain peace of mind by starting your succession plan today. Contact Peach State Wills & Trusts at 678-551-7082 or online to schedule a consultation with a succession planning attorney in Lawrenceville, GA.

For more information on estate planning, download our free guide here.