When you run your own business, time can quickly slip away from you. Before you know it, the months and years can go by in what feels like a flash. You’re always busy having to think about all the tasks that require your attention.
One of the consequences of being so busy, however, can be that you may not make time to plan for the future. Estate planning is one of those tasks you know you need to accomplish but never get around to. But, your business could be significantly impacted by this delay on your part if you never get around to solidifying how it will be treated as an asset in your estate plan. The time to address this need is now.
You can use it to say who should take over the business
You may already know who you want to take over the business when you’re no longer in a position to operate it. Making sure you have an up-to-date will and power of attorney documents in place is essential. A will gives you the opportunity to get your wishes down in writing so your family knows what to do with the business after you die. Power of attorney can also dictate who you would like to be responsible for your financial affairs when you no longer have the capacity to manage them yourself due to serious illness or injury.
Consider putting the business into a trust
Probate can take a while to complete. For business owners, there’s no time to wait while decisions are made on who should take over the reins. By placing it into trust for your intended beneficiary during your lifetime, the business can bypass probate and pass directly to the person whom you intend to take it over. A trust can also have tax planning benefits too.
It’s never too early to start thinking about your estate plan. Making some of the big decisions as soon as you can will help to ensure your loved ones can effectively carry out your wishes after you pass away.