Estate planning allows you to determine what will happen to your assets, like real estate and investment accounts, when you pass. If you’re a business owner, you also have to determine the future of your business. Find out what points to discuss with an estate planning attorney in the guide below.

What Small Business Owners Need to Know About Estate Planning

What happens if you don't address your business in your estate plan?

Ideally, you’ll have designated the details of business ownership in a will or trust. If not, state laws will determine the chain of inheritance. In most cases, the business will pass directly to your spouse. If you aren't married and have no children, your parents will likely inherit your company.

Why does estate planning for a small business matter?

Your business assets likely aren’t liquid, so if a significant estate tax is levied, it may be necessary to sell the business to cover these fees. Fortunately, your estate planning attorney will help you take advantage of IRS tax breaks to help pay these costs.

What needs to be taken into account if you’re a sole proprietor?

In this case, your business isn’t separate from your personal assets, and your personal possessions may be liquidated to cover business debts. An estate planning attorney will ensure that your beneficiaries don't experience any losses as a result. For example, they may advise you to place assets, like property, in a trust.

What’s there to consider if you have business partners?

A business plan should include a buy-sell agreement as part of the paperwork. This contract is drawn up between the shareholders or partners, and it outlines a precise plan for what happens if a partner passes or wants to leave the business. For example, the remaining partners may buy the remaining shares.

If you’re a business owner who wants to start planning for the future, contact the team at the Law Office of Dawn N. Murata LLLC, in Lihue, Hawaii. Attorney Murata has over 20 years of experience, and her team is known for providing each client with attentive, personalized legal counsel. Learn more about their services online, or call (808) 245-4572 to request a consultation.