Estate Planning as a Small Business Owner
Estate planning can be complex and time-consuming, but knowing that your property will be handled in accordance with your wishes after your death can bring peace of mind. An estate can include a home, car and other belongings, but many individuals do not know it can also include a small business. Here, the Harford County attorneys at Rodier Family Law discuss the importance of estate planning for your small business.
Establish a Will and Trust
When creating an estate plan, a will is the primary document that your loved ones will utilize to distribute your property and assets after your death. Making sure your business is correctly accounted for in your will, and ensuring you have all of your important business documents stored properly, will ease the burden of change for your family after your death. Furthermore, having an executor to delegate and distribute property, including sectors of your small business, saves time and energy. While a will is needed, it does not always ensure that your business will run smoothly when you pass away. For example, when you move your business into a living trust, your heirs can avoid a long probate process in regards to business ownership, keep your business information private and avoid certain taxes and legal fees associated with the estate-planning process.
Purchase Life Insurance
While creating an estate plan for your small business, it is vital to communicate with other members of your business, such as partners and employees. If you run a business with partners, it is essential that they purchase life insurance. Each partner should buy a term life insurance policy and name the other partners as beneficiaries.
Establish Power of Attorney
Power of attorney should be established in your estate plan in the event that you become incapacitated or unable to properly run your small business. There are varying types of power of attorneys that can be given, including a financial or special power of attorney. Financial power of attorneys can be given when you would like someone else to conduct financial business. For example, if you had to undergo surgery and knew the recovery time would be extensive, you can appoint a close friend or family member as the agent with a specific start and end date to handle the various financial needs of your small business. Furthermore, you can execute a special power of attorney, which would give the individual the ability to perform specific tasks such as reviewing documents and signing contracts on your behalf.
Speak to a Qualified Estate Planning Attorney at Rodier Family Law Today
There are many aspects to consider when establishing your estate plan, and your small business is one of the most important facets. Ensuring that the business you build remains successful after your death requires meticulous planning, strong communication and time consideration. It is never too early to start the estate planning process, and having a plan in place will reduce stress for both you and your loved ones. To learn more about estate planning, contact the estate planning attorneys at Rodier Family Law today.