Estate planning is an important task for everyone, but not everyone has the same experience when creating their estate plan. Business owners, for example, are tasked with securing the legacy and the finances of both their business and their family in the event that a worst-case scenario situation unfolds. With that in mind, we’d like to offer a few considerations that business owners should have in mind when grappling with their estate planning.
Business Succession Planning
If a business owner passes away before creating an estate plan, business assets may be passed on to the next-of-kin or their spouse. Depending on the nature of your business and your family’s involvement, this may not be problematic. However, you will need to actively plan a transfer of assets to non-related business partners if you have a specific heir in mind.
Ultimately, all business owners should have a plan for transfer of ownership. This way, the plan can be enacted in case you become unable to work, or if you decide it is time to retire from the business on your own accord.
Protecting Your Family
In addition to planning a smooth transfer of ownership, business estate planning can also set your family up with adequate support in the long run. Throughout the planning process, you can select life insurance and disability insurance policies that match your needs and provide assistance with expenses in case you are no longer able to provide income.
Another popular method of protecting loved ones is using tools like living trusts. With a living trust in place, business owners can begin the transfer of assets to loved ones during their lifetime. An advantage here is that your estate will be smaller at the time of passing, meaning the tax burden of the estate will also be smaller.
One final advantage of getting started on your estate planning is that you will buy plenty of time to divide family assets and business assets. This could potentially save a lot of stress and prevent creditors from attempting to repay business debts with family assets after your passing.
If You Are a Business Owner in Need of Estate Planning Contact Mobley & Brown, LLP for Assistance.
If you are searching for an estate planning attorney in Maryland, contact Mobley and Brown, LLP today. Our experienced legal team will work with you to meet your needs. Call us now at (410) 385-0398.