As a new business owner, your sole focus may be getting your business off the ground. However, you also need to constantly have an eye toward the future, and that means getting an estate plan together.
Your new business could flourish, and it may even become your family’s lifeline. Therefore, you cannot leave anything to chance regarding its future.
A good estate plan will ensure the continuity of the business
If you die without a will and a succession plan, your business could be tied up in probate for an indeterminate amount of time – and that could prove its ruin. If you want your legacy to survive, an effective estate plan is the best possible resource you can leave your heirs.
You also have to consider what would happen if you are merely incapacitated due to illness or injury. An estate plan can include powers of attorney that will allow someone you trust to manage the business and ensure operations continue on your behalf.
Alternatively, you could place your business into a living trust where ownership will transfer to a third party while still benefiting your heirs. This is particularly wise if your heirs are still young.
Estate planning is also a form of tax management
Your business is considered part of your estate, subject to inheritance and estate taxes. As a result, your estate and business at large are likely to take a financial hit from taxes – which may amount to a significant figure.
With proper planning, you can minimize some of these taxes and end up saving a considerable amount of money for both your business and your family.
Your estate plans, like your business, should change over time
Any drastic changes in life or the business should also be reflected in your estate plans. That’s why it is advisable to revise your estate plans regularly and ensure everything is aligned and current with the circumstances of your life and your goals.
Ultimately, the decisions you make now will shape the future of your company and determine whether or not it will be there in the coming decades.