Creating and building a successful business is incredibly difficult and challenging. Protecting that business is important. Here are a few protections that simple estate planning can provide business owners.
- Easily deal with future transitions to co-owners
If your business has more than one owner, an estate plan will allow you to specify your wishes to sell your portion to the co-owners rather than burden your heirs who may not want to operate the business. Combined with a buy-sell agreement, your business partners would agree to buy out your share of the business upon death. If your heirs are not in a position to become responsible business owners, this may be your best option so that your business is not damaged by your death.
- It guarantees that your business will survive without you
Estate planning can ensure that the brand you have worked so hard to create will survive long after your death. Some of the biggest companies in America started as family businesses but they failed to survive the transition to the second or third generation.
- It minimizes your taxes
Creating trusts, business entities, and other legal planning can allow you to pass along your business assets safely to heir while minimizing the amount of taxes that will be owned. Without advanced planning, your business may be subjected to unnecessary taxes that could force a premature sale or liquidation of assets in the event of incapacity or death.
- It creates a succession plan for your business
As a successful business owner, you know what the day-in, day-out operations are. You may have also witnessed other businesses around you fail because the transition to the next generation or new owner was not the most effective choice. Proper succession planning places your business in the right hands by selecting whom you want to run your business in the event of disaster or when you are simply ready to retire.
- You can plan for the future
An estate plan allows you to plan for the future. It allows your business to be successful long after you’ve gone. You can set long term plans and goals knowing they will be carried out.