No matter your age, if you own a successful business that provides income for your family, you need an estate plan as part of your business plan. Even young business owners need to be prepared for the worst, and that means setting up a plan that allows family members to step into your role with ease whether you are injured in an accident that leaves you temporarily or permanently incapacitated, or if you should unexpectedly pass away.
Why do you need an estate plan?
1. Without an estate plan, the business you worked so hard for might fail. Most of your family’s wealth has likely been invested in the family business, and having those funds suddenly become inaccessible could be devastating to your business. An estate plan ensures that legal documents and bank accounts are accessible to family members, because even if they know every aspect of the business inside and out, they may not legally have access to the documents and funds required to run the business day to day. An estate plan makes that possible.
2. Liability insurance should be set up to stay in place for a period of time after your death. An owner-controlled business is always at risk of lawsuits, and that doesn’t change when an owner passes away. The surviving family should protect profits by maintaining insurance for a period of time to be prepared in the event of a lawsuit.
3. Your loved ones need to be prepared to take over the business. While talking about death is never pleasant, family members need to understand aspects of the business so that they can step in after you pass without too much legal trouble. An estate plan can lay out important aspects of the business so they are ready to take over with confidence.
4. An estate plan can help your family avoid probate court. With an estate plan in place, the business will move smoothly from you to a designated family member without the need for a court to step in to put your business functions on hold.
Additionally, you should set up a living trust, which will have provisions in place for loved ones to take over the business as needed. A power of attorney is also important. With a power of attorney in place, a trusted loved one can be in charge of not only business details, but also Wills, trusts, and life insurance policies so the right people are placed in the right roles in the family business, and there is money available to keep it in operation.
Want to know more about a business estate plan?
Business estate plans can be much more complex than personal plans, so an experienced estate planning attorney is a vital asset when deciding on how to approach a plan. To find out what’s right for you, speak to an experienced estate planning attorney for guidance. The lawyers at ElDeiry & ElDeiry, P.A. would be happy to walk you through the decision-making process step by step.
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