Estate planning is crucial to protecting your loved ones and designing the legacy you want to leave. For small business owners, having an estate plan in place is even more essential, allowing you to make provisions for how the business's future and assets are handled in the event of your death. The following will provide answers to common questions that small business owners often have about estate planning.
Answers to Small Business Owners' Estate Planning Questions
How does an estate plan safeguard my business?
If a person dies without a will, the decisions regarding the division of their estate are left up to the courts. If the deceased was a small business owner, the courts would also determine how business issues are to be resolved.
By drawing up a will, the owner has the power to determine how their business is conducted and how business-related assets are divided after their death.
What should be included in estate planning?
Consider estate planning as a component of your overall business plan. An attorney will help you identify ways to minimize estate taxes and lessen the financial burden on your loved ones and business after you pass.
Buy-sell agreements are also helpful, allowing surviving partners or shareholders to buy your share of the business upon your death. Life insurance policies should be planned as well; these policies often provide the funds for partners to purchase a deceased person's share of the business.
What is a succession plan?
This is a document that details your exact wishes for the business after your death. It lets you determine who takes over the various roles within the business, if and how it should be sold, and how assets are to be distributed. Always discuss your succession plans with any other parties involved to ensure that everyone understands their roles and responsibilities.
Should I have a power of attorney?
Having a power of attorney is crucial, as it allows someone you appoint to make legal and financial decisions on your behalf. The death of a small business owner can mean a disruption to the business's operation, but having a power of attorney ensures that someone is in charge and has the legal authority to make decisions and provide oversight in the owner's absence until the estate is settled.
If you're a small business owner, contact Stuart R. Norman Jr. to start making estate planning arrangements as soon as possible. For over four decades, he has been representing clients throughout the New London County, CT, area with legal services in estate planning and real estate issues. Call (860) 376-0069 to schedule a consultation or visit his website to learn more about his practice.