Understanding the Importance of Legal Procedures in Construction

Taking a big-picture look at business development on construction projects and finding ways to make the process go more smoothly is an important part of building a successful enterprise. The law can be a large part of this, with improper execution leading to fights between partners and owners, accidental forfeiture of ownership, loss of key employees, liabilities for catastrophic damages, and even loss of life. Consequently, it stands to reason that a connection between what you’re doing as a business owner and what you’re doing as a legal custodian of assets and actions is not hard to make. In particular, understanding the functional basics of legal procedure with respect to assets can help a construction executive or company owner understand how to best anticipate contingencies that could affect a build.

An iconic example of one area of law that can affect construction projects and their longevity is the question of probate-what happens to property when emotions run high and people who have bad relationships suddenly inherit assets from deceased parties who have not made their wishes clear and ironed out the details? In Arizona, the comprehensive understanding of Arizona’s probate rules need to be understood, particularly if you’re going through a legal process directly affecting your business entities, ownership and other related issues.

Understanding the overall process of how a personal estate is liquidated through probate gives you a sense of the serious steps in order and how a family dynamic can be affected by people who have little experience with this kind of thing. There are a lot of rules to follow at various levels, from paperwork to property insurance. For your business, what this also means is that there are a lot of places where you can fall into an unexpected legal hole.

The overall consequences of probate and the rules associated with it mean that a business person needs to be looking ahead to how assets are managed over time-how development projects are handled, how you handle property management and leases, and how you instill a sense of good practices when it comes to managing assets. It’s all about preventing the worst-case scenario from materializing.

One area of questioning that can arise during probate is the idea of whether you’ve planned well enough to protect assets. For a construction person or company executive, this means planning ahead by setting goals with property, equipment and other assets. If your investments are linked to your projects, and your co-owners or family members have a stake in what happens to your assets, then they also need to be readied for a legal scrutiny.

As we often remind our audience here, the law has a way of affecting even the most seasoned of business professionals unexpected ways. That’s why it’s important to have good planning and resources available in case the idea of probate directly applies to you at some point. By knowing the basics of how assets are managed over time, you may be able to prevent some legal pitfalls.

In some industries, estate planning can be a double-edged sword. If you’re beginning to invest heavily in your business, maintaining staff, and investing in new technologies, you may not want to be distracted by problems stemming from estate planning. But “estate planning” does not always mean creating a will. It can mean creating rules around machines, technology, trademarks, methodologies and all of the capital that goes into a project.

In the construction field, any investment can be considerable-how do you plan around material investments if you don’t know how you will develop the property over time? And what happens on the business side if you don’t have a way to fund the business effectively and avoid challenges to projects that could arise?

That’s really what estate planning and rules around it address-maximizing long-term benefits of business assets while preventing pitfalls from affecting those assets and their overall retention. What does this mean for a business owner or an executive? It means planning ahead so that you can develop in-house legal knowledge so you know what to expect when you enter into business development agreements.

Without proper planning, you end up with a situation like the one at hand in the case linked in the introduction. Take, for instance, someone who had a family member with a minor stake in a complex project, where that family member suddenly passed away. The situation led to an inheritance dispute, as well as a general mismanagement of the major projects that were in progress.

That’s the last thing you want to happen on your team. Knowing how legal situations can occur and how to prevent them can help everyone involved in a construction project from general contractors to middle managers and even down to administrative support understanding how to navigate these waters.