If you own a business, make an estate plan right away to protect both your business and your family should you pass away. Many business owners devote all their time to their companies' present problems but do not spend time planning for the future. Unfortunately, their employees, customers, and family members could face major difficulties if there is no estate plan in place.
Succession of the Business
Business owners, whether of small or large companies, should consider who will take over the business should they suddenly pass away. A succession plan ensures that someone else will fulfill the everyday business activities that you do every day. Otherwise, your employees could go unpaid, orders unfilled, and customers neglected.
In making a succession plan, decide whether you want the company to stay open after your death or whether you want the business to be closed. Your plan should take into account the delays that can occur when estates are settled and assets located for the purposes of probate.
Assets Tied Up in the Business
Smaller business owners often have most of their assets or income tied up in their company. You likely have an ownership interest in your company and may have made personal contributions to fund large purchases. As a result, your family may have very few liquid resources after your death to cover burial expenses and their future needs. Consider setting aside money or property or insurance policies apart from your business to protect your family.
Planning for the Unexpected
You can use estate planning tools to prepare for the unexpected, both in your personal life and for the business. For example, you can secure your business against demands from your personal creditors by creating trusts and other holding companies. Further you may want to obtain liability insurance protecting the business against losses that could occur if you pass away, and purchase life insurance to provide immediate funds for your family. Consult an estate planning attorney to learn more.
To find out more about estate planning, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.
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