What occurs regarding their estate upon their death can affect many things a person cares greatly about. This includes a business they worked hard to make successful.
When a business owner dies, and clear and legally-enforceable plans aren't in place regarding the business and other parts of their estate, it could cause major disruptions for their business. Things that can be disruptive to a business after its owner's death include:
- Uncertainties over who will be in charge of the business moving forward.
- Legal conflicts over who will receive business assets and other parts of the deceased's estate.
- Delays in the probate process (as such delays could potentially leave the fate of the business or certain business assets in limbo for awhile).
- Estate taxes (as such taxes could result in business assets having to be used to pay the taxes).
Such disruptions could potentially leave a business without the assets or direction to keep being as successful as it had historically been or even keep going after its owner's death.
Estate planning is among the things business owners can do to try to prevent their future death from triggering these sorts of disruptions for their business. There are various estate planning tactics, such succession plans and trusts, that can be used by business owners to try to make the post-death transfer of their business go smoothly and protect their business' financial state upon their death. Thus, a business owner doesn't have to simply leave their business' future if tragedy were to strike up to chance, they can take efforts to try to safeguard it.
Now, every business is different and every business owner has their own unique goals when it comes to the future of their business. So, there is no one universal way of estate planning for business owners, what the right plan would be depends on the circumstances. Estate planning lawyers can provide business owners with explanations of what sorts things they could do in their estate plan to try to protect their business and their goals for it, given the particulars of their situation.
Source: The Huffington Post, "5 Things Estate Planning Can Do for You and Your Business," Kc Agu, March 31, 2016