As a small business owner, it helps to realize that you cannot think about estate planning without including your business. If you fail to plan for succession, you may inadvertently devalue one of the most valuable assets you have to leave.
What is business succession planning?
A business succession plan helps ensure your company continues when you are no longer able to control it due to death or illness. The lack of a plan could throw your company into chaos. It could result in angry customers, dissatisfied staff, legal problems and power struggles. None of which will benefit your family or your company’s worth.
Consider powers of attorney for your personal life and business
If you and your family rely on your business to survive, consider what will happen if things suddenly halt. Ensure you have a plan in place so that your spouse can access funds without any delay should you be unable to do so due to illness, injury or death. You should take similar measures to ensure your company can continue to make the financial transactions necessary if you can no longer do so yourself. Powers of attorney allow others to make decisions on your behalf. They can cover financial issues, legal matters and health care.
Consider how your business could affect taxes paid on your estate
There are ways to pass on your assets to your family while minimizing taxes. Remember, your business could increase in value after you make your estate plan and push you over tax boundaries.
You probably sacrificed time with your family to make your business a success. It would be a shame if they cannot reap the rewards of this sacrifice. Planning for your business’s future is an essential part of planning for your family’s future without you.