Is Estate Planning Important for Business Owners

As an entrepreneur/business owner, you have so many different things on your to-do list daily, such as sending invoices to clients, hiring new employees, or advertising your products. Most entrepreneurs, however, have so much on their plate taking care of present issues that they don't get to think about the future of their business.

Did you know that approximately 30 percent of entrepreneurs don't have an estate plan or haven't renewed their estate plans in years?

A business estate plan ensures that your business is protected if you die or had a life-altering accident. Although people are often not comfortable thinking about this matter, you should plan ahead because this will save the business you've poured so much into.

While this may not work for some businesses, a family-owned business owner should consider this, seeing that someone else in the family will acquire it.

Estate planning includes a business owner sitting down with his financial advisor and lawyer who already have experience dealing with this matter. In the interim, there are some things that you should start thinking about to make your decision.

Here are some things to consider when putting together an estate plan.

The Effect of Estate Planning

Many business owners don't have an estate plan because they say it's too hard to think about. They are afraid to consider what their business would be like without them being in control.

However, estate planning guarantees that the person who'll take your place at your organization is someone you have confidence in. Also, it will make the process smoother for your family if you prematurely passed or got disabled; this will allow you to have peace of mind.

It's potentially challenging, but it's best to make a plan detailing how you want your company handled if you die. Without putting these plans in place, the business you worked so hard for will end in jeopardy when you're gone.

Steps to Plan for your Estate as a Business Owner

Planning out your estate is a long process. There are many things to think about, such as different scenarios and hypothetical situations. In this case, you shouldn't try to put a plan in writing on your own. If you miss one issue when writing your estate plan, it can take years of litigation to correct it.

It's best to get advice from someone you trust. It can be a lawyer or a financial professional who is versed in this matter.

Below are some steps to planning your estate.

These documents are the heart of your business estate plan.

·   A will - this states your desire for the division of your property after you die.

·   A power of attorney - this is where you appoint another person to make some decisions for you if you're incapacitated; this is a compelling document, so you must carefully consider who you'll choose.  It will help you avoid going through a guardianship court case.

·   A Succession plan - Most entrepreneurs fall short about this because it takes a great deal of time to create it. A buyout agreement or if someone else in the company wants to become the new owner, a clause is sometimes added to the plan.

·   A living trust - Like writing a will, a living trust is someone who your assets will go to if you die. An advantage of having such a trust is that it's a private document, and the support can bypass validation. A living trust means you avoid Probate court!

If you don't compose a will, the state will take over your estate and determine what's most beneficial for your company when you depart. Having all these in place ensures that only someone you trust will take charge of your company.

While planning for your estate is vital to everyone, it's more so to a business owner. Writing a plan ensures your company remains successful.

Estate planning is a great idea to both avoid probate, and to prevent fights and family conflicts over the deceased intentions.  John Miller, our founding attorney, created Rock Solid Law to focus on the unique needs of the Jacksonville and Beaches area business community. For over 30 years Rock Solid Law has provided expert guidance and advice to clients in the areas of Estate Planning, Trusts, Wills & Probate, Real Estate: Residential & Commercial, Closings, Title & Escrow, and Small Business Representation.

 If you have questions about estate planning, contact John Miller at Rock Solid Law to help you.