Estate planning involves making important life decisions, but what if you’re an entrepreneur? How might your business or businesses affect your estate planning strategy? If you are an entrepreneur, here is what you need to know.
Understand the importance of estate planning for entrepreneurs
Estate planning is an essential part of any company’s future. This includes both small and large businesses. If you are an entrepreneur who runs a company of any size, it is important to have a plan in place to ensure that your business is well taken care of no matter what happens. Without business succession planning, there is no telling what might happen to the future of your business without your input.
Select a successor
Consider who you want in control of the business after your retirement or unplanned future events, like sudden death or incapacitation. Maybe you have a family member or key business associate who is more than capable of taking over your business. Take the time to work with or mentor this individual, ensuring they are not only capable of one day leading the business – but also willing and prepared to do so.
Clearly communicate your wishes
Your business succession plan should clearly define the direction of your business, the role of your successor(s) and anticipated timing of the transition, among other things. Communicating this in writing is critical even if everything goes according to plan but even more so if the unexpected occurs.
Keep your estate plan updated
No matter what your succession plan entails, it is important to regularly revisit your plan to ensure everything is up to date. Estate planning is rarely a one-time ordeal. Any number of life events can take place and especially when you own a business, it is critical to regularly review and keep your plan up to date.
Estate planning can seem daunting, especially if you run a small business. Proactively planning for a future transition can ensure that your business is in good hands when you are no longer there.
