As a business owner, you likely have more people dependent on you than most. While you could just let your business die with you, you might not want to, nor might your employees, customers and suppliers.
Hence you need to plan ahead so the business can still run without you. Your business succession plan can deal with most of this, but there are a few things you can do in your personal estate plan too.
Get help to understand the tax implications of passing it on
If your business is worth a lot, passing it on to others may result in a considerable tax requirement, in effect lowering the value of what you leave them: There are several legal ways to avoid this.
Ensure your plan is up to date
Remember, businesses can change a lot over time. You should review your estate plan every year or so. An estate plan that was adequate when you were first starting may entirely inadequate after a few years of success. When that happens, you will throw away the money you worked so hard to earn.
Consult any business partners you might have
Let’s say your general plan is to split your estate evenly between your three children. If your share of a business were to be included in your estate plan, it could make things difficult for your business partners.
Maybe they enjoy working with you but would struggle to cope with being in business with your kids. One option as business partners is to keep the company out of the estate plan and set a clause where the other partner has the first right to buy the deceased’s shares. The profits from the sale can then enter your estate plan to be distributed between your children.
These are just some of the things to consider. Seek legal guidance to find out more about creating an estate plan that protects your business for future generations.