fbpx

Integral Component for an Entrepreneur’s Estate Plan

Buy sell 2Many entrepreneurs have their noses to the grindstone and a laser focus on growing their companies. What are they missing?  A working succession plan.

While they’re working hard at it, many small business owners fail to consider what will happen if they are injured in an accident, suffer an illness, or die suddenly. These business owners who don’t take the time to create an effective estate plan risk undermining a lifetime of hard work, jeopardizing the jobs of their staff, and endangering the future of their loved ones.

Here's a list of important estate planning essentials for the business owner:

A Will. This is the most basic estate planning document. It lets a person or a small business owner say how his or her assets will be distributed and to whom. A will also allows the person creating the will to name a personal representative or executor to be responsible for managing and disbursing the personal and business assets according to the testator's wishes. If the business is a sole proprietorship, the executor or a trusted family member should be given access to digital assets like online banking, email, and the company website. This should be a separate document from the will because a will is a public document filed in probate court.

Power of Attorney. This designates a person to handle the business affairs, if the owner becomes incapacitated. If you don’t have this, the court will appoint a guardian to manage the affairs—and his or her decisions may not jive with the business owner's wishes. It could also cause conflict with the other parties.

Trusts. A will, again, is a public document and is required to be probated in court. That can cause issues for a small business wanting to protect sensitive information. As a result, a business owner may want to consider a revocable living trust. This trust takes title to property but lets the creator of the trust or the trustees continue managing the assets during his or her lifetime. Because it’s "revocable," it can be modified. A trust can avoid probate, transfer assets to beneficiaries privately and quickly, and allow a business to continue operating.

Buy-Sell Agreement. A buy-sell agreement is critical for partnerships or companies with just a few owners. This document establishes a way of distributing an owner's interest if he or she dies or becomes disabled. It is also helpful if an owner declares bankruptcy or is going through a divorce. The buy-sell agreement will also detail how to value the business.

Succession Plan. An entrepreneur’s comprehensive estate plan should include a formal, written succession plan, which provides for the seamless transition of the business. A comprehensive succession plan will state how ownership will be transferred, establish rules for hiring, compensating and promoting family members, and detail how disputes will be resolved.

An estate plan is a must for an entrepreneur. If you fail to have a plan that enables the business to continue operating, then your partners and family members will have an extremely difficult time trying to manage the business assets … and the disputes that will no doubt arise. Hire an estate planning attorney to establish a course for the future.

Reference: business.com (November 15, 2016) “5 Estate Planning Tips for Entrepreneurs”

 

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment

LIKE THIS POST?

We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Coronavirus/Covid-19
Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.