As a small business owner, you are probably constantly thinking about the future – and thinking about an estate plan should be no exception. Estate planning can protect yourself, your business, and your family.
- Some Planning Is Better than No Planning
You might not think that you need a plan or might feel that you do not have time to make one. Even a minimal estate plan could help. For example, you might sign a simple will and a financial power of attorney. The will indicates who should receive your interest in the business if you suddenly pass away, and the power of attorney allows an agent to take over management of the business if you become incapacitated or are unavailable.
- Business Succession
A more detailed plan can protect your business from financial disaster in case of your incapacity or death. Smart business owners set up business succession arrangements to explain who will take over the business and what they should do. Usually this involves signing a written contract. For example, you could agree with your partners that if one of you passes away, your interest in the business will be sold by your estate back to the remaining partners.
Business succession plans, like powers of attorney, can explain who should take over management if you are incapacitated or unavailable. Without documentation in place, your business might not pay its employees on time or receive important shipments. Even if the replacement management ends up being temporary, it is better than having no plan in place.
- Personal Protection
Estate planning also should help with personal protection for small business owners. When your business is your only income, you risk financial problems for your family if you cannot work. Consider taking out disability insurance and life insurance, as well as opening retirement accounts. If your business is doing well, you might have extra income to contribute to a trust. Your trust could fund your children’s college tuition or support your spouse should anything happen to you.
All in all, small business owners can benefit greatly from some basic or more complicated estate planning. Get started today by talking to a local estate planning attorney.
Want to start planning your estate as a small business owner? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.