When you run your own business, it’s easy for the weeks, months and even years to pass you by in an instant. You can feel like you’re always up against the clock.
While this may be great for your business, it can mean that you don’t take the opportunity to plan for the future. One job you should make time for is estate planning. You need to make sure you have a plan in place for what will happen to your company when you’re no longer in a position to manage it yourself.
Use your estate plan to direct who should take over
Legal documents such as a will and power of attorney are essential to have in place at all times. You can indicate here, in writing, what should happen to your assets after your passing, including your business. If you no longer have the mental capacity to handle your financial affairs yourself, you can specify through a power of attorney who you want to be in charge of them.
You might already have a person in mind who you’d like to take over from you when you pass away or are unable to run the company anymore for a reason other than retirement. Putting this information down on paper in specific ways will make your wishes legally enforceable.
Consider putting the business into a trust
There’s no time to wait for the probate process to be completed before someone can continue running your business after you pass away. By placing it into trust for your intended beneficiary during your lifetime, the business can bypass probate. The business will then pass directly to the person who you intend to take it over. A trust can also have tax planning benefits too.
Estate planning is a process that you can engage in at any point during your life. But, making some of the big decisions as soon as you can will help to ensure that your loved ones can carry out your wishes in the event that you pass away unexpectedly. With so much at stake, this is an effort worth making now.