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Nine steps for putting together a continuity plan

One key is to have people in place to make key decisions

Jul 27, 2014 @ 12:01 am

By Corey S. Kupfer

continuity, succession
+ Zoom

1. Identify a licensed individual capable of stepping in if you are incapacitated.

2. Give that person a limited power of attorney that allows him or her to act on behalf of the firm in specific areas, such as investment management decisions. It should also provide for the economic deal for such services.

3. Determine whether you also will give that person authority over such aspects of the business as finances, check writing and personnel matters, or whether those powers will be given separately to an employee or family member, or to another person.

4. Identify a person to take over in the case of your death or permanent disability. This can be the same or a different person as the one who will take over in case of temporary emergency.

5. Enter into a buy-sell agreement with that person to purchase your firm or clients upon your death or permanent disability, or into a limited power of attorney that grants that person the power to sell the firm on behalf of you or your estate.

6. Have clear documentation and policies and procedures for those people to rely on and follow with regard to the powers you are granting them.

7. Have your lawyer involved in developing, or at least reviewing, the plan to make sure it complies with all applicable regulations. Also have your lawyer prepare the required documentation.

8. Inform clients and key industry partners (such as custodians) of the plan's existence, and tell them who will have authority in each event.

9. Often, multiowner firms can distribute these actions among the partners. Steps are usually documented in the firm's operating or shareholder agreements.

Corey S. Kupfer is director of entrepreneur services at MarketCounsel

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