Owning a family business can bring loved ones together, providing a shared sense of purpose and giving you something to pass on. Estate planning transfers your stake in the company to those you trust in the event of your passing, leaving it in capable hands. Below are a few estate planning tips for those who own family businesses.

4 Estate Planning Tips Family Business Owners Should Follow

1. Prepare a Will

A will is the foundation of any estate plan, but they bring unique value to those who own businesses. This document allows you to transfer your stake in the company to whoever you choose, and leave behind instructions for how your other assets should be distributed. 

2. Create a Succession Plan

If you’re physically or mentally incapacitated by an accident or illness, who will take over the responsibility of running your business? If multiple family members are involved, having a succession plan as part of your estate planning can let you decide who you want to be in charge if the unexpected happens.

3. Write Powers of Attorney

A will carries out your wishes in case you pass away, but it doesn’t go into effect when you’re still alive, even if you’re incapacitated and unable to make decisions. By adding a power of attorney clause in your estate planning, you can choose a trusted loved one to sign your checks, access bank accounts, and enter legal agreements on your behalf to ensure the company keeps running as you want it to.

4. Consider a Buy-Sell Agreement

Family-run businesses are often operated as partnerships, with ownership shared among several relatives. If you’re leaving your stake to relatives who may not want to stay involved, a buy-sell contract requires your partners to buy your share from your beneficiaries upon your death, allowing your company to keep thriving and ensuring the whole family is comfortable with your arrangements.

If you need help with estate planning to keep your business always running smoothly, trust Wills and Trusts Hawaii in Honolulu, HI. After developing a thorough understanding of your situation, their estate law attorneys help you create trusts, living wills, and other plans to cover whatever tomorrow might bring. Visit their website for more on their services and experience, or call (808) 792-8777 to schedule an appointment.