Business is one such field where people are busy and have no time for themselves. In the line of business, you think about your business projects before even thinking about yourselves. This is why most people in business don’t have a proper plan for their business. They plan for the tasks and the expansions, but they forget to consider the situation when they won’t be there. Who would take care of their business? How would the business run after their death? This thought never occurs to a person in business.
Research says that 30% of business owners do not have a business plan, and if they do, it has not been updated yet. This is an unfortunate scenario in this respect as business people are the ones who need estate planning more than anyone. Thus, this article is here to help all such business people to make the proper choices during estate planning.
Why Is Estate Planning Required?
The great empire you have built all these years through hard work and persistence needs to be protected when you are gone; this is one of the primary causes as to why estate planning is required. There needs to be someone or a group who can hold on to your legacy and take your company or organization to a new height. This can only be done through estate planning.
Also, if you have children, you need to provide them with financial stability even when you are not there. So giving the company assets to the guardian (in case they are minors) will be the right choice.
Estate planning is all about providing financial security to your family after you are gone. This is why whether you are in business or not, you need to have an estate plan to better your family.
Tips for Estate Planning In Business
Have A Will
A will is a proper documentation that will include all your decisions that must be fulfilled after your death. There are some elements that must be considered in a will. First is the distribution of your assets. It would help if you clearly mentioned how you want to divide your assets and among whom. Also, you need to decide who gets the company shares and in what percentage regarding your company. Finally, if you want to pass the company to another person, you need to do that through a will.
The second thing you need to consider in your essential estate planning is having a power of attorney and a health care attorney. Come up with some mental issues and cannot make decisions of your own. Your power of attorney can take all the financial decisions on your behalf, and the health care attorney will be able to make medical decisions on your behalf. This is a very critical choice because you need to have the most trustworthy people in your life to do this job.
You Plan for Tax Efficiency
Now the government has tax laws that make you pay a small amount of tax before your assets or properties are handed over to your beneficiaries. Therefore, you need to plan your decisions in the right way so that you have to pay minimum taxes to the government. Of course, it would help if you were in constant touch with your lawyers and financial assistance regarding such decisions. But with a well-structured estate plan, you can come up with the best taxation plan possible.
Manage Family-Owned Business
Family-owned businesses cause a lot of issues in estate planning. For example, if you have two children, there is always a chance of a fight between the two regarding asset distribution. So before making the will, you need to carefully give a thought about what can be the repercussions of your decisions. It would help if you had a constant financial counselor guide you throughout.
Also, it would help if you kept in mind that no matter what, the family business must be kept within the bloodline as well.
Estate planning in business is tough and tricky, but it can be done with proper guidance. We hope that this article will help you make your estate plan for business. Call us today to speak with an experienced Estate Planning lawyer to see how you and your business can benefit from proper estate planning.