As a business owner, you have a lot to manage, and estate planning may often slip your mind without ever being initiated. However, to secure your business and ensure it will thrive after you are gone, you must begin estate planning.
Estate planning is critical for a business owner, and connecting with an estate planning attorney can help you achieve stability in the continuation of your business after you are gone.
Create an Inventory of Assets
Compiling an inventory of assets is the first step in the estate planning process.
You will want to do this for your personal and business assets. When you conduct an inventory of your business assets, remember to include things such as physical products, machinery, intellectual property, and business assets. You want to ensure everything that keeps your business running is included in the list.
This list can help you move forward with the plan, ensuring everything is accounted for.
Decide on a Succession Plan
Creating a succession plan will ensure a smooth transition between you and the next owners. You can decide whether this will be an external or internal succession plan, meaning you pass it on to a family member, business partner, or shareholder, or if you want the business to sell to a potential buyer.
Making a succession plan now allows you to strategize appropriately, train the right people, and ensure everyone involved with the succession is knowledgeable and ready to handle it.
Consider Opening a Trust for Personal and Business Assets
As a business owner, you likely have many assets tied to your company. As you continue through the estate planning process, it could be beneficial to open a trust to protect those assets and ensure they are passed down appropriately.
Trusts will help avoid probate and manage your assets properly, so nothing is held up in court when you pass, and your business can continue to run smoothly after you.
Plan for Tax Implications
As you create an estate plan and a succession plan, you must consider the tax implications of passing down or selling your business. You want to properly prepare your business and the next owner for what is to come.
During this stage, you should plan for any tax burdens and potential estate tax liabilities. An estate planning attorney and a financial advisor can help.
Develop a Plan for Business Continuity
As you estate plan for your business, the goal is to ensure a seamless transfer from you to the next owner. The best way to do this is by developing a business continuity plan. This plan will address business operations and ensure the next owner is prepared to take on what is to come.
Whether you are writing a succession plan, a trust, or a business continuity plan, you are ensuring that every aspect of your business is ready to be handed down without any hiccups in the operations or financials.
Connect With Your Estate Planning Attorney Regularly
Estate planning is not a one-and-done situation. As your business grows, operations change, and mindsets shift, it is essential that you meet with your estate planning attorney regularly to keep your will, trusts, and documents updated.
This is the case for any type of estate planning. Whether you are a business owner or not, it is important to revisit your estate plans and ensure they still align with your current goals and objectives for the future.
Estate planning is essential for business owners. If you have further questions or wish to start estate planning, contact the team at Hartmann Law.