For most business owners, their business is their most valuable asset. It is not just a source of income for themselves, but the livelihood of many that they employ. This being the case, it is crucial to develop a business estate plan that protects your company’s assets. Experienced estate planning attorney, Doug Lauenstein, discusses some the benefits of having an estate plan for your business.
Many businesses have two or more partners, making it important to devise a plan in the event that one of the partners becomes deceased. Making decisions such as choosing a successor or taking out life insurance policies can all be beneficial, as long as they are in the best interest of the business. At times, a life insurance policy can allow the remaining partner to buy a deceased partner’s shares of the business from their estate.
Even if you are the only person running the business, creating an estate plan can help to prevent your successful enterprise from taking a downturn after your passing. Consider developing a plan for all of your existing business relationships that includes anything that someone may need moving forward. This includes usernames and passwords, online bank accounts, file sharing sites, and access to any other accounts that your successor may need to access.
Additionally, this is a good time to make note of what your business is worth if you were to liquidate all of your assets. Often, a business owner or their beneficiaries may want to sell their business before they pass away. Knowing the value of a business, and its inventory, property, etc. is very useful information when trying to determine the best time to sell.
Overall, estate planning for your small business can be even more important than estate planning for an individual, so it is essential that you properly draft and revisit a business estate plan every few years to update it based on any life changes. Regardless of the size of your company, it is helpful to have an experienced attorney review your individual situation in order to help you develop the best plan for you and your business. If you have any questions about your specific business or personal estate plan, contact Douglas Lauenstein for more information.