About 644,868 small businesses operate in Washington, according to the U.S. Small Business Administration. When you are a business owner, estate planning can help ensure the continuity of your business.
For instance, if you become incapacitated, a power of attorney can keep your operations going. You give another person the authority to act on your behalf for the business.
1. Choose the right agent
Your agent should possess sound judgment, integrity and a thorough understanding of the business operations. Common options include business partners or colleagues such as your second-in-command. Other options include professional advisors, family members and corporate officers. Always make sure your agent is aware of their role and willing to do it.
2. Protect assets and operations
By designating a trusted agent through a power of attorney, business owners can safeguard their assets. The agent can handle financial transactions, sign contracts and make necessary business decisions.
3. Establish clear guidelines
To facilitate smooth transitions and avoid misunderstandings, establish clear guidelines. Include specific instructions regarding the scope of authority, limitations and responsibilities of the agent.
4. Review and update regularly
Review and, if necessary, update the power of attorney periodically. Changes in business structure, key personnel or legal regulations may mean the document needs changes to stay relevant and effective.
5. Communicate with stakeholders
Inform key stakeholders, such as employees, clients and suppliers, about the power of attorney. Explain who the agent is. This transparency can help maintain trust and ensure a smooth transition in case the need arises.
By delegating authority to a trusted agent, entrepreneurs build the resilience of their business and offer various people peace of mind.
