As a small business owner, the hard work and focus you put into your business ever day most likely consumes you and leaves little time to be thinking about the future. However, since the future is not guaranteed to anyone and your business is your pride and passion, you should be looking out for your business by establishing a comprehensive business estate plan.
Consider the alternatives if you neglect having a plan in place, if you pass away you will be leaving your heirs without clear instructions regarding your wishes. This can severely jeopardize the business you have worked so hard for.
Since your business is most likely going to be the largest asset of your net worth, you should understand why taking time to plan for the future is so important. When you meet with an estate planning attorney, you will want to make sure you cover these components to ensure a successful estate plan.
Will
Everybody is aware of a will and that it allows you to dictate what you want to happen to your property after you die. But it also allows you to identify the executor who will be in charge of that property and their distribution according to your instructions. You should also include a provision in your will that allows the executor or someone you trust to have access to bank accounts, email, social networking sites and passwords.
Trusts
A trust acts just like a will and will allow you to control what happens with your property after your death. However, a trust does have other advantages over a will. The assets and property that you place into a trust will not have to go through the probate process. This means, besides having assets transferred to your heirs more quickly, you will have privacy in these matters since probate court is a public platform. Also, with a revocable or living trust, you can easily change the terms at any time prior to your death.
Power of Attorney
Owning a business means you have payroll obligations and other business documents that may constantly need your attention. By creating a durable power of attorney document, you can name a trusted individual to handle these business affairs for you if you are incapacitated. Without your designation, the court will have to appoint a guardian to handle these duties. If this happens, it can add stress and confusion to your business.
Succession plan
If you are a sole owner with no other partners, you should have a clear plan for what happens with your business after your death. If your wishes are to pass the business on to someone else, you should have a plan in place that delegates your successor. If a successor changes as time goes by, you can always update the plan. If you prefer that the business be sold, you should indicate in your plan your wishes of how the business is to be sold.
Estate planning for your business means you are preparing for what you want for your business and ensuring your wishes will be carried out. Having this information available means you are preventing disagreements that may come up from others who must assume what you may have wanted.