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Three estate planning steps for business owners

| Oct 2, 2019 | Business Formation |

Entrepreneurs are incredibly busy. Between managing daily tasks, employees, management and their personal lives, business owners rarely have time to sit down and enjoy their free time. It makes sense then that most owners feel like they don’t have to start their estate plan.

But estate planning doesn’t have to take away from your time. If anything, it helps you save time and effort in the future when you decide to retire or cannot act as the primary operator. Luckily, there are a few steps that business owners absolutely need to take during the estate planning process.

Establish a will

Everyone needs a will to determine the future of their assets and other belongings. However, a will is especially critical for entrepreneurs because it allows business owners to choose the business’s executor – the person who is responsible for running your company after you leave.

Without an executor or a proper succession plan, your business is at risk if you are incapacitated due to a severe accident or illness. It may put your company in the middle of a horrendous courtroom battle since no one is sure what your intentions are. Your best strategy is to establish a will and make a smart choice for your business executor.

Design a succession plan

As mentioned previously, wills are necessary for naming who takes over the business. However, a succession plan outlines the transition between you and the future operator of the company. It allows your business to thrive and maintain its standard routine with minimal interruptions.

Another benefit of developing a succession plan is the peace of mind you will have as the current owner. Like any other aspect of estate planning, you are alleviating stress from yourself and your loved ones by ensuring your legacy lives on, even when you aren’t there.

Organize key records

Along with a will and succession plan, owners should gather all their vital records into one estate plan. For example, if the entrepreneur has critical tax forms, trusts financial statements, life insurance and the business plan, they should collect this documentation in one cohesive place.

The organization is key to a successful and straightforward estate plan, especially for your business partners or loved ones. Estate planning doesn’t have to be a huge inconvenience for business owners, especially if you analyze the benefits from a proper plan.