Estate Planning Tips for Small Business Owners
Small business owners have some additional complications to consider when planning their estates, especially if they wish to ensure a smooth transition in the company upon their passing. Here’s a quick overview of the steps business owners should take to set their company up for success after their death.
- Start with the basics: Begin with your will and the basic framework of your estate plan. You can address your personal issues first before weaving in your business interests. This will also include powers of attorney and healthcare directives. Purchase life and disability insurance.
- Sort out any issues you might have: It’s not uncommon for there to be issues with potential arguments over who takes over the business, especially if it’s a family business. Be sure to address these issues with your family openly and honestly.
- Build a succession plan: Your estate planning documents should specify who runs your business if you’re disabled, and can also tie into your business succession planning to determine how transitions in ownership should occur after your passing. Any information about succession in your estate planning should be consistent with information included in additional succession planning documents separate from your estate plan.
- Draft a buy-sell agreement: If you have a business with multiple owners, you should make a buy-sell agreement part of your estate plan. This will outline who is able to purchase your share of the business, at what price and under what conditions. This ensures the business stays in the control of existing ownership.
- Continue to update: Update your estate plan as needed to make sure it always reflects your wishes and your current life situation.
For more information about the issues business owners should confront with their estate plans, contact an experienced Tampa estate planning lawyer at BaumannKangas Estate Law.