Estate planning is a good choice if you own a business and if you are worried about the future of it. A lot of people have been thinking about estate planning for a long time but they haven’t jumped on it. There is no rush but you must plan your estate if you own a business and want the future security of it. Also, an estate plan comes with a lot of benefits for a business owner so if you are a business owner then it can be helpful for you. We strongly advise all the business owners to go with estate planning for your business as it is very important.
You have spent your whole life to build a business and you wouldn’t want it to vanish after your death right? Yes! Your business can be harmed without an estate plan because now you aren’t here to run it. In this case, whoever will be in charge is going to drive your business as he/she wants. Estate planning is something that can give you the power to manage the future decisions of your business. Also, it can save you from a lot of tax implications, and you get the benefit to pick the right beneficiary or person who will take over in your place. Estate Planning can be advantages to any business or company.
Estate Planning for Business
It doesn’t matter if you have a small business or the biggest company out there; estate planning can give you a piece of mind and a shield to protect your assets. Anybody who owns a business can easily benefit from estate planning. A lot of small business owners think that it is expensive for their business and they just keep on pushing it away. A study has confirmed that more than 30% of business owners don’t have an estate plan. Having a business estate plan means covering your business-related issues according to your wishes.
Benefits of Estate Planning for Business
- Options for business – Having good estate planning can make a whole lot of a difference. Have you ever considered setting up a buy-sell agreement and taking out a buy-sell insurance policy. If you have partners in your business can you imagine inheriting one of their family members as a partner especially one that knows nothing about your business. This form of planning can proof useful especially once your business partner is no longer around. This will allow an insurance policy to buy out your partners shares paying his/her family at death leaving you their shares in the business.
- Good for long-term business – You had an idea a dream and today you own a major corporation which is super profitable. Having a good estate plan means covering the basis of who can make business and financial decisions if you’re ill or mentally incapacitated. A good estate planning attorney will consider all scenarios for the future and will include a Durable Power of Attorney into your planning to insurance while you are in the right state of mind you choose who will run your affairs if one day you’re not able to. They will also potentially set up trusts to create a layer of asset protection as well a vehicle for pass through of assets to the next generation.
- Good for tax mitigation – You built a business, you got it to be profitable and now you wish to safeguard this asset for you children and grandchildren. Your business is part of your estate and at the time of death a liquidity event occurs. A good estate planning attorney will account for this and create a legal structure to minimize your tax exposure.
- Good future planning for business – Estate planning does give you the power to choose a business plan for the future. You can pick the person who will run your business, how you wish them to operate and even mandate a holiday party in your honor once a year if you wish so. You can create strategies that the company must follow and even dictate benefits for family and co-workers. This doesn’t mean that you should as none of us have a crystal ball and can see into the future. Good planning should leave room or flexibility for adjusting to current times but none the less it’s nice to know you can control some aspects of your business even when you’re no longer around.
- Business Succession – After your death people may try to take advantage of the moment for personal gain. You may find you’re your spouse and children fighting over assets and businesses. Avoid this and take control, create an estate plan dividing and giving assets as you see fit to those that matter to you most. Perhaps you have a business that you want to leave to one child and an insurance policy to the other. Perhaps you have a vacation home that you wish to be sold and profits evenly distributed to your kids. Take control come up with a plan and have an estate planning attorney put it in writing.
Estate planning is for everyone. If you have a mom and pops liquor store or a chain of restaurants both you and your loved ones can benefit from estate planning. Estate planning can be as simple as who runs my business if I’m ill to as complicated as selling of assets and distributing money after I’m gone. It can be as simple as leaving everything in equal shares to your children to as complicated as reinvestment of assets and controlled distributions based on specific life accomplishments of your children. For example wishing your estate to distribute money necessary to cover a wedding or down payment for the first house, but not to pay for a two week vacation.
In the end, we have told you the benefits and importance of estate planning for a business. We are here to guide you with all types of estate planning queries. You can simply contact us to set up a free consultation with one of our experienced lawyers who can help you with creating a custom tailored plan. Sometimes planning an estate can be a little tricky we are here to help.