Why Business Owners Need an Estate Plan
Running a business is not easy nor does it leave a lot of leisure time for business owners. Typical they must work long hours regardless of whether or not they have a family.
In fact, some days they may struggle just to keep up with tasks at home and family activities. That makes trying to fit in extra things, even if important, more difficult.
But taking care of family and those they love is, of course, a priority too. Therefore, business owners need an estate plan just in case the unthinkable should happen.
Not Everything Can Be Anticipated
A business owner’s time can easily be filled with building up their business and all that goes with it. During the hours they are at home they’re likely juggling kids, chores, and other activities.
Passing away, then, is not the first thing on their minds most of the time. If they’re a younger person they probably think it will be many years before they have to worry about death.
Obviously a business owner could have something catastrophic happen and not actually pass away too. For instance, they could be in a horrible car accident or get very ill.
Regardless of the circumstances, the point is that not everything in life can be anticipated. Consequently, business owners need an estate plan.
It May Prevent the Business from Shutting Down
So, what happens if a business owner passes away without some type of plan in place? Or, nearly as bad, the owner of said business becomes too sick to run the business?
It’s entirely possible that the business could close with nobody to take care of day to day management. Even if a family member or trusted employee knows what’s needed they may not be able to take some actions. Legal documents and bank accounts may not be accessible which could put operations as a stand still.
Basically, all assets would likely be probated which means lawyers and legal fees eating up a ton of money. Worse yet, everything could be tied up during this process for months leaving loved ones with nothing.
To prevent leaving others behind with a legal mess and no money, business owners should create an estate plan.
Planning for Loved Ones is Necessary
Talking about the possibility of death may seem kind of morbid. However, planning for loved ones is necessary for those who run a business. Not only do personal effects need to be handled but children, spouses, and other family must be provided for.
Setting up a living trust is one way to avoid probate. It allows the business owner to remain in control of their assets. At the same time, it makes provisions for loved ones.
Legal forms, such as financial and medical durable power of attorney, should also be prepared. Healthcare advanced directives can be completed in addition to wills, trusts, and updated life insurance policies.
Clearly there may be other legal documents needed. That’s why each estate plan must be created and tailored to individual needs and situations.
There’s no question it can be tiring and stressful to run a business. But business owners need an estate plan so they can plan ahead for the care of family and loved ones. Taking a little time to complete one just may help them rest a little easier.