With the right estate plan, you can minimize the chance your business will suffer or cause family conflicts after your death.
Ready to start your estate plan?
updated May 11, 2023 · 3min read
Almost no one likes to contemplate their own death, and maybe that's why so many small business owners don't have an estate plan. But avoiding estate planning is a mistake that can have devastating consequences for both your business and your family.
An estate plan empowers you to choose what will happen when you are no longer able to run your business. It also protects your family from being blindsided by taxes or business debts that could have been avoided.
Common estate planning documents for small business owners include:
A simple set of documents may be sufficient for a small business. But as your business grows in size and complexity, your estate planning needs may become more complex as well.
Here's what you need to do to establish an estate plan that protects your business and your family:
What should happen to your business after you are gone?
Explain your goals to an estate planning lawyer. The lawyer can advise you on the best estate planning strategies for your situation. The lawyer will also ask you about your family, your other assets, and to whom you should grant powers of attorney.
Once you have some guidance, talk to your family and business partners if you have them.
Explain what you want to do and see if they are on board, or if they have legitimate concerns.
This avoids surprises and conflicts later, and helps you see if there are problems with your plan that you hadn't thought of.
Estate planning documents are worthless if they're not signed, and some documents, such as wills, must be signed in the presence of a witness to be valid. Follow your lawyer's instructions for signing, witnessing, or notarizing the documents.
Good estate planning means taking care of everything that will be triggered by your death. You may need to get life insurance, update beneficiary designations on IRAs or insurance policies, or transfer assets into a trust. Your lawyer can advise you on additional steps you should take.
It's easy to put off estate planning, but when you create an estate plan—that includes both your family and your business—you gain peace of mind that you've done the best you can for your business and for your loved ones.
by Jane Haskins, Esq.
Jane Haskins is a freelance writer who practiced law for 20 years. Jane has litigated a wide variety of business disp...
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