Unique estate planning considerations for business owners

On Behalf of | Aug 11, 2021 | Estate Planning |

Your assets pass to your heirs and beneficiaries according to the instructions you establish in your will when you pass away.

When estate planning, business owners need to think beyond their personal assets to consider what will happen to their business. Here are a few of the questions business owners should consider when estate planning.

Will you sell the business or keep it in the family?

If you want to pass your business on to an heir or other specific individual, you must name them as the beneficiary. When estate planning, you should also name a contingent beneficiary on any document where you list beneficiaries. This will allow the asset to pass to the person of your choice should your first choice pass before you do.

Does your business have co-owners?

Work with your co-owners to decide if you want to establish a legal agreement in which, upon the death of one of you, the deceased’s business interest will automatically sell to the surviving co-owners. This will prevent the business from unintentionally transferring to a beneficiary of the deceased’s estate.

What are your tax liabilities?

The value of your business will likely change between the time you design your estate plan and when you pass away. The taxable estate will include the value as of the date of your death.

Every business owner should have a succession plan in place. Specify who will run your business and make decisions in your absence. It is a vital step in an estate plan and also useful should you ever become incapacitated and unable to run your business for a period of time.