There’s a good chance you’ve thought about estate planning. There’s also a good chance you’ve put it off. Why would you need to plan for your death? You’re not really sure you need to make a plan. And, besides, you’ve got plenty of years ahead of you.
Well, we hope you do have many years ahead of you, but the truth is there’s never a guarantee. Bad things happen. The question is whether you’ve made plans to get your family through them. And your business. As a business owner, you want a plan. Or more accurately—you want a better plan.
Business owners need different plans
The real question is never, “Do I have an estate plan?” Anyone who dies without creating a personalized plan will have their estate divided according to the laws for intestate succession. This means the real question is whether your existing plan is good enough. Will it protect your family? Will it ease their burdens? Will it ensure the survival of your business and the careers of all those who work in it?
The odds are intestate succession isn’t good enough. A recent article in USA Today recounted the story of one business owner whose mistakes should serve as a warning. The entrepreneur had separated from his wife and started a relationship with another woman. He lived with his girlfriend for more than 10 years and had children with her. But he never got a divorce or created an estate plan, so the girlfriend got nothing while his legal wife got half the business.
Imagine the difficulties the company might face. What if the new owner had no personal stake in the company’s success? What if she wants to liquidate its assets? What happens to the employees?
A good estate plan will provide a clear vision for your business, as well as your family and personal assets. This might include:
- A will. This is a basic estate planning tool that outlines how your assets are distributed. But it can also do more, such as placing business assets in a trust and naming a trustee to manage them.
- A succession plan. Who will take over after you’re gone? If you can, you’ll want to groom your successor in advance, and addressing your business succession in your estate planning helps avoid confusion.
- Disability insurance and life insurance can help provide for your family when you’re no longer able. Remember to update your beneficiaries as needed.
How many people count on you?
Estate plans aren’t about you. They’re about the people you care for and who count on you. Have you done enough to protect their interests?