Estate Plan Tips for Business Owners:
TIP #1: Create a will.A will is helpful no matter what type of business you own. This type of documentation can help you dictate exactly what you want to take place after your death. Usually, businesses with no will in place will be passed to close family members. Save your employees and family members the effort and name your successor in a will.
TIP #2: Consider a succession plan.A succession plan can help your successor navigate their new role. A solid plan contains the name of the successor, a training plan, and how your successor will be taking control of the business. This plan is a good roadmap for whoever you choose to take over your venture. Whether you pass away, retire, or are unable to work for another reason, a succession plan can help your successor navigate their new role.
TIP #3: Think about future taxes.Estate taxes can be a hefty burden should the original owner pass. Once a business owner passes, the tax may be due soon thereafter. As a business owner, there are ways to minimize the tax burden on your successor.
TIP #4: Purchase life insurance.A life insurance plan can help to cover the financial burden of a loved one passing. A business owner should consider buying a life insurance policy to benefit their business, as well. A partner or your successor may even be named the beneficiary of your policy, to make the transition smooth.
Potential Risks for a Business with no Estate Plan:
- Higher taxes
- Dispute between heirs
- Division of assets based on legal requirements
While it is typically unpleasant to plan and even think about the plan you will need to have in place, it's an important step in owning a business. There can be negative consequences if you do not have a plan in place. Get ahead of the situation and plan on your succession for the sake of your business and/or your family. If you don't have a plan in place, give Gibbons Law Firm a call today. Your initial consultation with our business lawyer at the Lake of the Ozarks is free!
Remember, your initial consultation with Gibbons Law Firm is always free.
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