Entrepreneurs are incredibly busy. Between managing daily tasks, employees, business, and their personal lives, business owners rarely have time to sit down and enjoy their free time. Business owners may feel that they don’t have time to dedicate to the estate planning process.
But estate planning is not a waste of time and can actually be a time saver and proper planning will make life easier in the future. 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 may be especially critical for small business entrepreneurs who currently serve as the primary decision maker for their businesses. The executor of the business owner’s estate will be responsible for running the company after death and before ownership transitions to the beneficiaries of the business owner.
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. Your best strategy is to establish a will and make your wishes as to the operation of the business clear.
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.
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 business plans or operation records, he or she should collect these documents 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.