Business owners require thorough estate planning.
You own a business.
Perhaps you own more than one business.
Whatever the situation, your have a lot of responsibility.
Your loved ones, employees, and customers all depend on you.
According to a recent The Wealth Advisor article titled “Estate planning for business owners and executives,” business owners have a lot at stake if they fail to create or update their estate plan.
An estate plan does more than simply pass your wealth to heirs through a last will and testament when you die.
It is also essential for incapacity planning.
If you are incapacitated through injury or illness, you will need a general durable power of attorney to give an agent the authority to make legal and financial decisions on your behalf.
Those with minor children will need to select a guardian to rear them if you and your spouse both die.
Estate planning involves reviewing beneficiary designations.
Retirement accounts, annuities, life insurance, and some jointly owned properties will pass directly through these non-probate transfer methods than through a last will and testament.
If you have minor children or children with special needs, a trust can provide greater protection for assets.
A family member or professional could serve as the trustee.
Many business owners value tax planning, privacy, and philanthropy in estate planning.
Those who own a business require more sophisticated estate planning.
The complexity of their interests and responsibilities demands a carefully planned management and succession plan for the business.
This needs to be documented and aligned with your general estate planning goals.
In some instances, business owners choose to separate the power of attorney responsibilities.
For example, she may select a trusted employee to manage business affairs while selecting her husband for personal decisions.
If you have a partner in business, having a buy-sell agreement in place could provide your family with income and keep the business functioning should something happen to you or your partner.
Business owners should plan early and review often to ensure their affairs will be buttoned-up legally and financially should they die or become incapacitated.
Reference: The Wealth Advisor (July 28, 2020) “Estate planning for business owners and executives”