No one likes to think about what life will be like after we’re gone. For many of us, discussing our own mortality can be extremely difficult. However, it’s essential to do this in order to protect the futures of both our family and friends.

What You Need To Know About Estate Planning as a Small Business

The process of estate planning allows you to organize what will happen to your assets and liabilities after you die. While it is necessary for everyone to do it, it’s particularly important for business owners.

Estate planning helps facilitate the transfer of your assets (such as your business, car, properties, savings, etc.) to your loved ones.

Without estate planning, your family could face legal struggles or lengthy processing times to gain access to their inheritance. Not to mention, the future of your business would be in great jeopardy.

As an entrepreneur, there are a few key details you’ll need to know about estate planning and how to do it. Here are our top estate planning tips for small business owners.

Write a Will That Includes Your Business

You probably don’t want to envision a world in which you can’t control your company or watch it flourish. While it may be hard to think about, business estate planning is vital for two main reasons.

Firstly, it allows you to choose who will take the reins when you’re gone. You can choose whoever you see fit (ideally, someone who you know will dedicate themselves to the success of your business as much as you did).

Secondly, a business estate plan also simplifies and streamlines the process of handing over your enterprise after you’ve passed away. With this plan in place, there’s no guesswork; there are simple steps to follow.

With that in mind, your first step needs to be writing a will that includes your company as one of your main assets. As a business owner, your Will should include all the following details:

• How your business and other properties should be divided and distributed upon your death
• A power of attorney, which appoints another person to manage your finances and business transactions if you become incapacitated
• A healthcare directive, which appoints another person to make important medical decisions on your behalf if you cannot do so autonomously

Resolve Family Feuds in Advance for Family-Run Businesses

When a business becomes a family affair, estate planning can become even trickier. Specifically, if you have a family-owned and operated business, you could have some trouble deciding who to leave your business to.

For example, if you have two children and both of them contribute to the business, you may want to only list one of them as the beneficiary. This, however, could cause unpleasant tensions between the two of them.

As a result, you should make an effort to resolve any family feuds as well in advance as you can. Talk openly with all the involved family members and explain your decision-making process.

Keep them in the loop and remain open to their thoughts and perspectives. You should also be flexible and willing to make changes if needed.

Work With an Experienced Estate Planning Attorney

Hiring a seasoned estate planning lawyer is one of the most important things small business owners should invest in. This is large because estate planning is a complex process during which you could encounter some unexpected issues.

“Issues within probate, estate planning, or adult guardianships may involve multifaceted problems with a person’s family or finances,” says Kathleen Pence of Pence Law Firm.

Having an expert in your corner who understands how to navigate these issues and complexities is worth its weight in gold.

Conclusion

While it may be tempting to put off your estate planning, it is far better for small business owners to take care of these tasks sooner rather than later.

Doing so will reassure you and your family that your affairs will be handled seamlessly after your passing. Undoubtedly, that peace of mind and security regarding the future is something we all deserve.

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