It's always better to start planning your estate sooner rather than later. However, as long as you are considered to be mentally competent, you can plan your estate at any time in your life. If you have a small or medium-sized business, it is a good idea that you consider planning your estate as soon as possible, because your situation is likely to be more complex than most.
Believe it or not, it can take as long as 10 years to adequately plan a more complex estate involving a family business. So if you want to ensure that your legacy lives on after you pass away, you should start considering who you want to be listed as your beneficiaries, and what assets you want them to acquire. The following are four things that you should consider when planning your estate.
Living trusts are becoming an increasingly popular choice for those who want to avoid probate and specify the terms of inheritance. You may want to keep your business shares in a trust. By doing this, the trust will effectively own your business until you pass away and it is transferred to a beneficiary.
Unless you are certain that your business will continue to effortlessly generate income after your death, you should think about life insurance. This will act as a reliable safety net for your loved ones, and you will be safe in the knowledge that they will always be provided for.
If you are not the only owner of your business, you should have a buy-sell agreement in place. This will act as a guarantee that the other owners of the business will buy out your shares in a situation in which you become disabled or pass away.
If you are planning for your child to take over your business at the end of your lifetime, make sure that you have a succession plan in place. This will outline exactly how the business will be transferred over to them.
If you are the owner of a business and your want to start planning your estate, take action as soon as possible so that you can ensure that you leave behind a legacy for your loved ones.