Estate planning is a useful business tool that many business owners unfortunately overlook. As the economy and commerce evolve within the United States, it’s becoming more and more important to understand how to protect your business and life’s work. Estate planning provides business owners with the opportunity to not only distribute assets from their business after death, but also to ensure the longevity and continuity of your business. This blog post will explain some of the key advantages to estate planning for your business
Why Estate Planning for Protection of My Company?
Estate planning protects your company by ensuring that your business and it’s assets remain where you want them to be after your passing. A comprehensive estate plan includes wills, powers of attorney, and health care directives in case of emergency for your business. For example, in the case of incapacitation, your estate plan would be able to assign who could access your business’s financial assets, who would step in to run the business, etc. Ultimately, this allows your business to run, well, as “business as usual”, without too many hiccups.
Practical Ways Estate Planning Protects your Business
Trusts help to protect your business when you make your trust the owner of your business’s assets. This helps you avoid a probate process, provides privacy, and distributes your assets more smoothly. For example, if you own your own office and you put that office in the name of your trust and leave it to an heir, this would completely avoid probate would be effective upon your death or incapacitation, depending on your wishes. |
Many business utilize trademarks, copyrights, or patents. Luckily, these are all federally protected by the United States Patent Trademark Office and the U.S. Copyright Office. However, there are some benefits within estate planning that can further help protect your business’s intellectual property, such as management and renewal of them after your passing.
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A buy-sell agreement essentially sets the terms between partners of how to recover or sell shares in the company. Estate planning can help provide a clear plan for all partners and shareholders of how exactly sheares would be distributed in the event of your death. Life Insurance other hand, helps liquidate policies to heirs after your passing. Having these things included within your estate plan for your business, can help provide clear instructions and keep things running smoothly. |
As a business owner, it is highly recommended that you work with a tax advisor along with your estate planning attorney to ensure that you understand what is best and how much to allocate for tax liabilities. |
A business succession plan lays out who exactly would be assuming company responsinilites, how they would assume that responsibility, and exactly what their roles would be. This can include colleagues, family members, or other key members of the company. This ensures that your position is filled in case of incapacitation or death. |
In Conclusion
These points highlight some of the ways that estate planning can help protect your business’s legacy. You deserve the peace of mind that the company that you have poured into is safe and secure, and continues long after your passing.