Whether you own a small or large business, planning for the future requires extra considerations when establishing an estate plan. For many business owners, their enterprise is their life’s work, as they’ve invested significant time, effort, and resources to make it successful. Creating an estate plan for your business is essential to ensure that your legacy and hard work are safeguarded for the future. If you’re an entrepreneur considering creating an estate plan, please don’t hesitate to contact an adept Montgomery County Estate Planning Attorney who can help you ensure your beneficiaries clearly understand your wishes after you’ve departed.
Why is it essential for business owners to consider estate planning?
If you want your family to continue your legacy after you pass away, with estate planning, you can stipulate a clear business plan to your beneficiaries through a will. The first consideration you should consider when estate planning is a buy-sell agreement. Buy-sell agreements are integral for businesses with multiple owners. With this agreement, numerous business partners can purchase your share of the business upon death. Generally, business owners create a buy-sell agreement to ensure that their heirs don’t inherit a business they have no interest in running. Instead, existing business partners can purchase the shares for a fair price.
It’s also beneficial for business owners to establish life insurance policies as depending on the profitability of your business, it may not be enough to provide for your family after your death. In such cases, a life insurance policy would ensure your loved ones are financially cared for. As mentioned above, many business owners want to pass their legacy to their loved ones. To make the process of passing down your business to a family member easier, you should create a succession plan.
A succession plan is a process through which you can identify individuals who will inherit your enterprise. You can also stipulate when and how they should gain control of your business. Additionally, you can delegate authority and responsibility to your successors. This will help ensure that your wishes regarding the future of your business are carried out. Furthermore, you can create a living trust holding your ownership shares. This step will help keep your business out of probate.
If you’re considering creating an estate plan, do not forget to keep your business in mind. After pouring your heart and soul into maintaining your business, you should take the necessary steps to protect its legacy. At JD Katz, we can help you create a well-drafted estate plan that safeguards your business for the future after your death. Contact us today to learn more.