If you are a small business owner, chances are you have put your all into getting where you are now. You have sacrificed time, money, heart, and more to build your business into a success, and you continue to work to maintain that success and a reputation of integrity. Have you ever thought about what would happen to the business you have built up if something were to happen to you? What about the livelihoods of your employees? Although many small business owners don’t think about it, estate planning for your business is something you should take care of in addition to your personal estate plan. If you haven’t thought about making an estate plan for your business at Lake of the Ozarks, this blog will talk about three things to think about to make it easier for you when putting your plan together.
Someone to Lead in Your Stead
Sometimes a business owner's spouse or other family member may be highly involved in the business, and in a position where they can step up and run the business. Sometimes there are partners that are more knowledgeable about the business and may be a better choice. If neither of these are a practical option, you want to think of another person who would be capable of running your business and talk to them about that possibility. Then you’ll want to make a plan for what that transition would look like. Your successor will need access to bank accounts, financial information, online accounts, technical information about the business, and more. Once that transition plan has been created, be sure to put it in a place that it will be accessible along with your estate plan.
Sometimes, it makes more sense for the family to sell the business rather than own it, if they are not feasibly able to take over the leadership role. In that case, having information for valuation of the business, as well as important information to make it easier for the next business owner, and therefore a more appealing business for a buyer should be part of your estate plan. If you have partners who you believe would be interested in stepping into the leadership role, you can provide an option for them to buy your portion of the business out. It is not uncommon for business partners to take out life insurance policies on each other so in the event one passes away, there will be funds to allow for that type of buyout. If you believe your family would benefit more from a cash payout for your portion of the business, you could provide for that option if no one is able or interested in learning how to run your business and taking on that responsibility.
Probate and Tax Timelines
It’s important to be aware that there are tax implications when the owner of a business dies, and that tax burden comes with a timeframe. Unfortunately, some businesses find themselves forced to liquidate in order to cover that tax burden within the required deadline. It is a sad way for business to end, and it does not have to be that way. If you prefer that your family or business partners have the opportunity to take over the business, let's talk about an estate plan for your business.
Business Estate Plans - Protecting Your Legacy
As business law attorneys in mid-Missouri, we know that having an estate plan is not always intuitive for small business owners. So we wanted to let you know why it is important, give you a few things to think about, and offer you a free initial consultation at Gibbons Law Firm. Just call our office at (573)348–2211 to schedule an appointment with one of our estate planning attorneys in Lake Ozark. We are capable of helping you with all your business legal needs, and very familiar with the process necessary to get this important plan in place for your business and your peace of mind. We also have regular legal information and helpful tips on our social media channels if you’d like to hear more. We have links below for your convenience, feel free to follow us!
Remember, your initial consultation with Gibbons Law Firm is always free.