You can use an estate plan to get ahead of questions about what happens to your assets after you pass away.
If you are a business owner, you can also incorporate your business interests into your plan in a few different ways.
Naming a successor and developing a seamless succession plan benefits everyone involved during the transition period. Without a plan, your business may lose clients, important partnerships, or get behind financially. Open communication with beneficiaries helps smooth the process.
A living trust is similar to a will. It acts as a separate entity that transfers your business over to your beneficiaries immediately following your death. Some benefits of creating a living trust include:
- Avoiding probate
- Creating an agreement privately with an attorney
- Minimizing taxes and expenses
With a living trust, business operations can continue with little or no disruption to daily operations.
If you are not the sole owner of your business, you can create a buy-sell agreement to determine what happens to your portion of the business. The other owners or heirs can buy your shares from beneficiaries uninterested in ownership of the business.
Life insurance is always a great way to provide for your family after you pass. Additionally, it can provide funds for a buy-sell agreement should beneficiaries decide to retain or sell ownership of the business.
As you navigate the details of your estate plan, keep in mind that this process should allow your family to grieve your loss without worrying about the business. You can use this opportunity to make it easier for them.