Where the business and the plan collide
A will can leave shares or a membership interest to heirs, but it does not tell anyone how to run the company the next morning. Operating agreements, shareholder agreements, and partnership agreements often control who may own an interest and what happens when an owner dies or becomes disabled, and those terms can override what family members expect. Without a buy-sell arrangement, co-owners may find themselves in business with a spouse or child who has no interest in the work, while the family may hold an interest it cannot easily sell. A durable power of attorney that clearly covers business decisions keeps things moving during an illness.
Agreements and numbers to bring
Bring the entity's formation documents and any agreements among owners, including amendments, along with recent financial statements and any prior valuation. Life insurance tied to the business, whether owned by the company or by co-owners, matters because it often funds a buyout. Loans and personal guarantees you have signed should be on the list, since those obligations do not disappear at death. If family members already work in the business, note their roles and which relatives do not. A rough sense of what you would want the business to become, whether sold, kept, or wound down, helps us draft toward a real goal.
Questions that set the direction
Early on, we talk about who could actually lead the business and whether that person is inside the family. Fairness among children is a frequent concern, especially when one child works in the company and others do not, and equal is not always the same as fair. Estate tax can become a cash problem when most of an estate's value is tied up in a private company, so we look at whether the estate would have money to meet its obligations without a forced sale. We also coordinate with your accountant, because entity structure and tax elections interact with the plan. The goal of the first meeting is a sequence of steps rather than a single document.
