Successful business owners often think of every problem that could impact their business. Forecasting potential troubles and making contingency plans might keep a business in decent operational shape. Forward-thinking entrepreneurs may realize that estate planning could factor into the process because a business owner might pass away or suffer an incapacitating illness. The business and its obligations must go forward after an unexpected event. Having the right contracts and agreements in place could increase the chances that the company remains in capable hands.
Drawing up a will that specifies directions about asset distribution, both personal and business ones, might make things easier for heirs. In particular, business assets may need to go to someone with the necessary experience and skills to handle them. With that said, a family need not be cut out of the revenue generated from a business. A will could care for loved ones while also setting a stable course for the business.
Crafting a succession plan helps in a situation where a business owner ends up incapacitated due to medical or other issues. Succession plans may prove valuable when planning to retire as well. Ultimately, succession plans provide directions about what to do with the business. The business could go to family members or be sold on the open market. Maybe the best step involves shutting the company down. Whatever the owner prefers, the succession plan would state their preferences.
Another thing to think about is insurance coverage. Life insurance may cover some or all business expenses upon the owner’s passing. “Key person” insurance might list a business as the direct beneficiary. Both life and key person insurance could help family members financially if an unforeseen tragedy occurs.
Businesses are an essential part of estate planning for entrepreneurs. An estate law attorney may help a business owner ensure that their family is taken care of should business operations be interrupted by an unexpected life event.