Estate planning is often only considered within the narrow lens of personal financial planning. Few people realize how essential it can be to protecting your business. As discussed in a Huffington Post article titled, “Five Things Estate Planning Can Do For You and Your Business”, proper estate planning can help protect your business after your death.
If you pass away without proper estate planning, the government could hit your business with taxes exceeding 40%. Furthermore, co-owners or family members could disagree over value of your business. Estate planning can also give you more options for how to pass on your business. You could for example set up a buy-sell agreement which ensures that when an owner dies, the other co-owners can purchase your share of the business often with the help of insurance paid on the death of the owner.
Estate planning can help ensure that your business will continue after your death. Without a transition plan in place, the loss of an owner can potentially be devastating for a business.