Plan who will own and run your business next

Business Succession Planning Attorney Boca Raton

Business succession planning decides who will own and run your company after you retire, become incapacitated, die, or decide to sell. Trust Counsel, PL focuses on business succession planning for owners. We serve clients in Boca Raton, and the firm’s office is in Coral Gables, Florida.

What Business Succession Planning Covers for Boca Raton Owners

Business succession planning sets out who takes over ownership and management when an owner steps away. It applies to sole owners, co-owners with shareholder or member agreements, and family businesses where heirs may or may not work in the company.

A business interest needs more than a standard will. The company’s operating agreement, bylaws, or buy-sell agreement controls how ownership moves between owners. Your will or trust controls what happens to your share at death. These documents have to fit together.

Why an Ownership Plan Matters Before a Crisis

Unresolved succession questions can slow decisions about the company you built.

In Florida, unless the will says otherwise, every personal representative has a right to, and shall take possession or control of, the decedent’s property, except the protected homestead, but any real property or tangible personal property may be left with, or surrendered to, the person presumptively entitled to it unless possession by the personal representative will be necessary for purposes of administration. The personal representative has no right to, and shall not knowingly take possession or control of, a surviving spouse’s one-half share of property to which the Florida Uniform Disposition of Community Property Rights at Death Act, as described in ss. 732.216-732.228, applies (Fla. Stat. § 733.607). The personal representative must take the steps reasonably necessary to manage, protect, and preserve the estate until distribution (Fla. Stat. § 733.607).

Common triggers include a sudden death, an owner’s disability, a divorce, a partner’s exit, or a disagreement over value. Each one can force a decision the company never planned for. A plan written before a trigger gives owners more choices. Whether a plan fits your company depends on the facts.

Core Tools: Buy-Sell Agreements, Operating Agreements, and Trusts

A buy-sell agreement, an operating agreement or bylaws, and a trust work together to move a business interest to the next owner.

A buy-sell agreement sets who may buy an owner’s interest, which events trigger a sale, and how the price is set. For an LLC, the operating agreement governs relations among the members and with the company. Where the operating agreement does not otherwise provide for a matter it governs, such as relations among the members or the rights of a manager, chapter 605 governs that matter (Fla. Stat. § 605.0105).

Whether an LLC interest can be transferred depends on the operating agreement and the statute.

For a corporation, a qualifying shareholder agreement can transfer management authority, including how a deadlock is resolved (Fla. Stat. § 607.0732).

A revocable trust can hold a business interest. A settlor may generally revoke or amend a trust whose terms do not expressly make it irrevocable, but this default rule does not apply to a trust created under an instrument executed before the Florida Trust Code’s effective date (Fla. Stat. § 736.0602). The trust terms must still match the company’s agreements. Funding is easy to overlook. The interest has to be moved into the trust using the company’s ownership records.

Estate Tax and Asset Protection for Business Owners

Estate tax can shape succession planning when a closely held business makes up a large share of the estate.

Federal law can spread estate tax payments over time. If a decedent was a citizen or resident of the United States at the date of death and the value of an interest in a closely held business that is included in determining the gross estate is more than 35 percent of the adjusted gross estate, the personal representative (the executor for federal estate tax purposes) may elect to pay part or all of the federal estate tax in 2 or more (but not exceeding 10) equal installments (IRC § 6166).

Valuation matters early. For a business interest held as a partnership or proprietorship, fair market value is the net amount a willing buyer would pay a willing seller, neither under compulsion and both with reasonable knowledge of relevant facts, determined on the basis of all relevant factors including a fair appraisal of the business’s assets, with goodwill, and its demonstrated earning capacity (26 C.F.R. § 20.2031-3).

Whether that threshold matters for your estate depends on the facts.

Entity structure and trust planning are among the topics reviewed when asset protection is discussed. No plan can promise protection from every claim. Families with ties to other countries bring additional questions, which the attorney reviews in the first conversation.

When Co-Owners, Heirs, or Fiduciaries Disagree

Disputes can start when co-owners disagree on price, heirs disagree on management, or beneficiaries question a trustee’s decisions.

A trustee must keep qualified beneficiaries reasonably informed. A trustee of an irrevocable trust generally has 60 days to give notice after learning that the trust was created, or after learning that a formerly revocable trust has become irrevocable, such as at the settlor’s death. This requirement does not apply to an irrevocable trust created before the effective date of the Florida Trust Code, or to a revocable trust that became irrevocable before that date. The notice covers the trust’s existence, the settlor’s identity, the right to a copy of the trust, the right to accountings, and that the fiduciary lawyer-client privilege in s. 90.5021 applies with respect to the trustee and any attorney employed by the trustee (Fla. Stat. § 736.0813).

Some wills and trusts require arbitration of disputes between beneficiaries and a fiduciary. That provision is enforceable, except for disputes over whether the will or trust is valid (Fla. Stat. § 731.401).

Trust Counsel’s practice includes trust litigation and probate litigation. The firm advises and represents trustees, personal representatives and beneficiaries. Trust Counsel’s attorneys can serve individually as trustee or personal representative.

Your case may be referred to another lawyer or law firm.

What the First Attorney Conversation Covers

The first conversation looks at your company’s documents, who should succeed you, and how any buyout would be paid for.

Bring your operating agreement or bylaws, any buy-sell agreement, your existing wills and trusts, and a list of your business interests and co-owners. Recent records showing who owns what also help.

The attorney reviews the facts of each matter in the first conversation. Who should own and manage the business next? How would a buyout be funded? Which documents need updating? Bring questions too, such as how the plan handles a sudden death, a disability, or a sale.

Leslie V. Marenco is the business succession planning attorney responsible for this page. The practice’s office is in Coral Gables, Florida, and it has assistants and office staff.

Next Steps for Boca Raton Business Owners

Your next step is a conversation about your company’s documents and who should step in next.

If a co-owner, heir, or family member is waiting on a clear plan, you don’t have to work through the documents alone. Call (305) 707-7126, schedule online, or book a free strategy call. The first consultation is free, confidential, and comes with no obligation to continue.

Frequently asked questions