Running your own business is hard work and often leaves little time for anything else, including planning for the future. If you have not yet considered estate planning as a business owner, you need to make this a priority.
Consider what would happen if something happened to you, such as an accident, illness, or even death. Who would run your business? Who would make sure your livelihood isn’t jeopardized?
While estate planning may feel a little morbid, as a business owner, you need to be making provisions for when you have gone.
What do you want to happen to your business?
The first question you need to ask yourself is what you want to happen to your business when you are gone. Do you want it to be wound up? Or would you prefer to leave it to family members or perhaps a business partner?
Whatever option you choose, it is crucial that you make your wishes clear, as otherwise, your business risks falling into the wrong hands.
Have you written a will?
One of the most important elements of estate planning is writing a will. If you have not yet done this, the sooner you do it, the better.
If you die without a will, your assets may be divided up according to intestacy laws. This most likely means that they will be shared between your closest relatives, such as your spouse and children.
However, if you have written a will, you can clearly set out your wishes and ensure that your business goes to the people you want it to.
Do you have a lasting power of attorney?
Although often overlooked, lasting power of attorney is an important part of estate planning. This is the process of appointing a trusted person or people to make decisions on your behalf when you are no longer around.
A lasting power of attorney can also speak on your behalf if you have lost mental capacity due to illness or an accident. However, without one in place, your assets may be frozen by the courts, causing severe disruption to your business.
Do you want to set up a trust?
Although trusts can be complex, some business owners prefer to set one of these up rather than leave their business directly to a relative.
If you do not want your beneficiaries to inherit your business interests directly, a trust enables them to benefit from any shares without having to be involved in running the business.
If you think this is the best option for you and your business, you should seek estate planning help from a trusted firm such as Prime Wealth Advisors, which can explain how this process works.
Final thoughts
Although you may not want to, as a business owner, you should start having conversations about estate planning sooner rather than later.
Of course, these aren’t the easiest conversations to have, but they are indefinitely better than your family struggling with grief and sorting your estate at the same time.
