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Estate Planning for Entrepreneurs

Estate Planning for Entrepreneurs

By:

Posted April 17, 2018

There are many important issues involved in having a good estate plan in place, and those issues become more complicated if there is a business involved.  As important as it is to have a proper will and power of attorney signed, it is also important to ensure that your affairs are set up so that, if something happens to you, those close to you know what to do with your business.  Here are a few things to consider:

  1. Signing authority:  If you have a corporation, is the bank account set up so that someone else other than you, that you trust, can sign for the business?  It can often take time for the paperwork to get done to change signing authority if you are incapacitated or no longer living – having something in place now so that someone you trust can continue to sign cheques to pay bills, payroll, and other essential ongoing expenses is of key importance in ensuring business continuity.
  2. Business Operation:  Who will run the business if you are not there?  Everything from managing the cash, to managing employees, to managing sales and ongoing contracts, should be considered.  It is a good idea to have a memorandum, or at least a discussion, with your spouse, partner, family friend or relative who would be your power of attorney or executor, as to how you would envisage the business continuing – who you would trust to carry out the tasks – and who would have the ability to carry out various functions.
  3. Sale or Termination:  It may be that, if you are the sole employee, or the sole proprietor, of the business, your attorney or executor will have no choice but to shut the business down.  That may entail selling off inventory, bringing in third parties to complete contracts, terminating or assigning a land lease, or other legal or accounting issues.  Your thoughts ahead of time as to how that process would unfold is an important part of a good estate plan.  Alternatively, there may be a good market for your business, and providing guidance ahead of time as to how your attorney or executor would go about selling off shares or assets is very important.

What I’ve set out above are just a few of the many issues that you as an entrepreneur must consider, in consultation with your lawyer, in preparing a good estate plan – and goes beyond just having a will and power of attorney in place.

This blog post was written by Ted Mann, a Partner in the Wills and Estates, Real Estate, Business and Bankruptcy teams.    He can be reached at 613-369-0368 or at ted.mann@mannlawyers.com.

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Ted Mann (Retired)

Ted Mann (Retired)

As one of the founders of Mann Lawyers, I have been helping clients with real estate transactions, estate planning, estate matters and insolvency for over 30 years. I also have extensive commercial, corporate, and tax law experience. With every client I try to bring a fresh and creative approach, sensitive to your needs and circumstances, whether personal or business-related. I am also experienced in providing legal advice to individuals, same-sex couples, and organizations in the LGBTQ community. I graduated from Osgoode Hall in 1978 and was called to the Ontario Bar in 1980. I practiced law in Toronto and Prince Edward Island prior to moving to Ottawa in 1987.  I have practiced law here since then and am proud to call Ottawa home. Beyond my law practice, I am also passionate about life—enjoying swimming, pilates, skiing, kayaking and hiking. I am active in local theatre and music, frequently taking part... Read More

Read More About Ted Mann (Retired)

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