Estate planning is important for everyone — but it’s even more critical for small business owners. If you own a small business, estate planning is essential to ensure the legacy you worked so hard to build is preserved for future generations. While the unexpected can happen at any time, it’s vital to have a strategy in place that will protect your company and carry out your wishes. Specifically, entrepreneurs should consider implementing measures for business succession planning, tax planning, and strategies to safeguard their intellectual property.
A last will and testament is not the only estate planning document a small business owner should have in place. While every small business owner’s estate plan will look different, there are a number of tools that are commonly used to plan for the future. Based on your needs and goals, estate planning for business owners may include the following documents:
Estate planning for business owners is an ongoing process. As your business grows, it’s important to review your estate plan at regular intervals to ensure it still reflects your wishes. By having a comprehensive estate plan in place, you can help to safeguard your business assets and provide for your loved ones in the way you intend.
Business succession planning is a crucial aspect of estate planning for business owners and entrepreneurs that can help to reduce the potential for conflict among members of your family or business partners. A business succession plan dictates who will take over your business in the event you decide to retire, become incapacitated, or pass away. Depending upon how you structured your business, you might choose to pass it on to a child or other family member, sell your shares to a partner or third-party, or close the business. In addition, a solid business succession plan should include provisions that help employees transition during the change of ownership and management.
A good business succession plan can accomplish the following:
Business succession planning is not one-size-fits-all. The process involves a substantial amount of preparation — and a plan should be reviewed on a regular basis. Once the plan has been created, it must be implemented to ensure your successors have the training needed to take over the business in the future without disruption.
If you are a small business owner, having a comprehensive estate plan in place is vital to ensuring your company is protected and your wishes are carried out in the future. The attorneys at White & Bright, LLP have extensive experience assisting entrepreneurs and business owners in California with their estate planning matters. Call us at (760) 747-3200 or fill out our online contact us form to schedule a consultation to learn how we can help.