As the owner of a company, you have many important decisions to make every day, from hiring and promotions to marketing and sales. However, have you considered what would happen to your business in the event you should pass away? Though it can be incredibly unpleasant to think about, you’ve put a considerable amount of time into ensuring the success of your business, so you should have a plan. If you’re not sure what to include in your estate plan as a business owner, the following blog explores the considerations you should make. You’ll learn more about the importance of this process and why connecting with Pennsylvania estate planning attorneys is in your best interest.
Why is estate planning important for a business owner?
When you fail to create a comprehensive estate plan that explores your wishes for your business, you’ll find that your business is at risk. Unfortunately, if you don’t have a plan in place, your business may be unable to continue running, and the assets held will be distributed according to Pennsylvania intestate laws as opposed to your wishes. As such, you may find that even if your business does not cease operations immediately, those who inherit your company may not know how to handle these matters, meaning your company could be shut down shortly after your death regardless.
In addition to having an estate plan, it’s important to understand why you need to establish a succession plan. Essentially, this dictates how your business will continue operating without you. As such, you can include information like who will take over, how certain parts of your business function, and what details they need to ensure things can run smoothly following your passing. However, you can use your succession plan to supplement your estate plan, as it will reduce confusion and potential disputes among beneficiaries regarding who is entitled to what portions of your business.
What should I include?
In your estate plan, it’s important to understand what information to include. Typically, you’ll want to inventory and distribute your assets, including those that are not a part of your business. For example, you may want to divide your life insurance policy among your children or leave a trust fund to your grandchildren. As such, you’ll begin estate planning like normal.
However, you’ll also need to consider implementing different agreements into your plan. For example, if you are one of many owners, you may find that creating a buy-sell agreement can help ensure that your company is still successful while taking care of your loved ones. This allows your family to sell your share of the company to the other owners so they do not have to run it if they don’t want to without sacrificing the profits.
There is a litany of important considerations you must make when you own a company and want to plan for the future. As such, it’s important to connect with an experienced estate planning attorney from Friedman Schuman Layser who can help you determine the best way to ensure your wishes are met while protecting the integrity of the company you’ve worked hard to create. Don’t wait until it’s too late – contact our team today to learn how we can help you achieve peace of mind for the future.
