Estate planning should be a priority for small business owners. An estate plan sets up a clear path for your loved ones to run your business when you’re not around. If a person passes away without an established estate plan, chances are, the business is likely to die with them. The Albin Oldner Law, PLLC team is here to provide some tips on what a small business owner’s estate plan should cover so you can avoid an interruption in your business.
1. Create a Will or Estate Plan
To begin estate planning, a will, healthcare directive, and power of attorney must be set in place. A will is one of the most essential items a business will need, as it prevents a business from being separated by state laws. However, your planning shouldn’t stop with just those three items. Each business is different; some may require more work behind an estate plan. Be sure to speak with an attorney before settling your plan.
2. Take Care of Estate Taxes
When a business owner passes away, their successor must sell a portion of the business to pay estate taxes. To reduce state taxes, we suggest dividing the estate into numerous trusts or creating a family limited partnership.
3. Have a Buy-Sell Agreement Ready
A buy-sell agreement allows your heirs to inherit the business and for other business partners to purchase your interest in the business. Your interest can also be sold to a third party, or through this agreement, you can block them from buying your interest in the company.
4. Create a Succession Plan
Before you finish, ensure that a succession plan is set in place in the event of your passing. It’s critical to be open and direct with your staff and partners about who will take over to avoid any conflict.
Creating an easy transition for your business should be your top priority. If you’re in Frisco or the surrounding areas and want to establish an estate plan, contact our office at (214) 423-5100 today. We will review your options and keep your best interest in mind when making an estate plan. Don’t hesitate before it’s too late.