Estate Planning Tips for Small Business Owners

If you are like most small business owners, you are may not have considered what occurs if something were to happen to you. Would your business survive? Who would take over? Planning can ensure that your business can continue on past your lifetime. Here are some important tips to consider for proper business estate planning.

1. Create a Business Estate Plan

Create an estate plan to direct how you want your assets, including your business, to be distributed after your death. Name an executor who understands your business and can manage the transition efficiently and effectively.

2. Plan for Business Succession

Create a clear succession plan, especially if you have partners or co-owners. Determine how the business will be transferred or sold upon death, and address issues such as buy-sell agreements.

3. Deciding Fairness vs. Equality in Family-Owned Businesses

Balancing the desire for fairness among family members, particularly if the business makes up a large percentage of your assets is challenging. Not all family members may be involved in the business, so deciding how to distribute assets equitably requires thoughtful planning.

4. Prepare for Tax Implications

Transferring ownership of a family business can have significant tax implications. Consulting with tax professionals can help you minimize the tax burden and make informed decisions.

5. Plan for Digital Assets

Collate your essential business information, such as account numbers, passwords, key contacts, and operating procedures to share with your loved one. In this digital age, consider what will happen to your online business accounts, social media profiles, and more. Specify who will manage or close these accounts after your passing.

6. Communicate Plans with Loved Ones

Openly communicate with your loved ones about your decisions regarding your business. Involve them in the process, so they understand your wishes and can be prepared.

Estate planning is not a one-time event but an ongoing process. Review your plan regularly and update it to reflect any changes in your life circumstances or estate laws. By following these tips and taking a proactive approach to estate planning, you will enjoy the rewards of owning your own business for many years to come, while securing a prosperous future for yourself and your loved ones.

The Law Office of Andrew Gavrin provides free initial consultations and is happy to provide more detail on these or other topics, and answer all of your questions. You can find more information at GavrinLaw.com or by contacting Andy Gavrin at andy@gavrinlaw.com or 484.416.5740. The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only. Note that information may not constitute the most up-to-date legal or other information.