Q: How does estate planning help my business?

-Curious Company Owner

A: Dear Curious

Estate planning is absolutely crucial for business owners. When you die or if you become incapacitated, not having a plan can not only be disastrous for the company, but also cause major expense and conflict for your family.

Your plan will vary greatly depending on your particular business, but below are a few examples of commonly used estate planning tools and their benefits:

Living trusts: Unlike wills, assets put in trusts are not subject to probate, so they keep your family out of court and conflict and transfer your business assets immediately upon your death or incapacity. Trusts also keep your estate contents private, let you designate a business successor, and can save on taxes, court costs, and legal fees.

Buy-sell agreements: If your business has multiple owners, a buy-sell agreement can ensure that if something happens to you, the other owners are able to easily purchase your shares of the business so they don’t end up in business with your heirs.

Succession Plan: If you plan to pass control of your business to a family or team member, a succession plan can provide detailed instructions for successfully managing the business in your absence. The plan lets you designate a specific individual to run the company and dictate exactly how and when the business should be transferred to him or her.

A Family Business Lawyer® can help you put the optimal estate planning strategies in place to ensure your business is dealt with in exactly the way you wish once you’re gone.