Estate Planning: A Starting Place For Business Owners

Adversity has a way of forming us, if we let it. I heard somewhere that you're either winning or learning. On that note…

• Is there an emergency plan in place if something happens to you? 

• What are your retirement plans?

• Are all of your business eggs in one basket?

• What happens next? 

Let’s go a little deeper…

Estate Planning: A Starting Place For Business Owners
“My own view is that every company requires a long-term view. For a business owner, that long-term view should include a solid estate plan.” – Jeff Bezos

When business owners with assets pass away their estates are settled in one of three primary ways:
No Will: Without a will, the state's legal code determines how the assets are divided, typically through a legal process called probate.

With a Will: Having a will still requires the estate to go through probate, but the distribution follows the directives laid out in the will.

Living Trust: With a valid living trust where assets have been properly transferred, the estate is managed privately according to the trust's terms, bypassing the probate court.

For business owners, understanding these options can make things easier on your loved ones after your departure. This, generally, is estate planning. Neglecting estate planning just means the 1st option. In those cases, the probate court dictates how your estate is resolved. The probate process can be lengthy—often taking over a year—and can be expensive and is public. Creating a will allows the court to follow your specified instructions for asset distribution, though it doesn't permit you to control the timing or conditions of the inheritance. A living trust provides more control over assets. It allows you to dictate who inherits your assets and also when and how they do so, all outside of court involvement. A living trust keeps the estate settlement private and can speed up the process.

So why would someone choose a will over a living trust? 

Honestly, the decision can come down to cost concerns - setting up a living trust is often more expensive than a will. But serendipitously, I was made aware that there are FREE will prep and living trust estate planning tools from Freewill:

Will here: https://www.freewill.com/will/basics/personal/get-started
Living Trust here: https://www.freewill.com/rlt/basics/personal/get-started

FULL Disclosure: I haven’t tried these out or known others to use them, yet, but it looks compelling and I plan on checking it out.

Starting with a will that includes an advance healthcare directive and a durable power of attorney is a great place to start. These documents ensure that designated individuals can make healthcare and financial decisions on your behalf if you become incapacitated. But depending on your situation a private trust could be a better choice.

Either way, estate planning is a good exercise for business owners and can include digital asset management and strategies for handling global investments, so be thorough as you go through this process.

While it's important for every adult, business owners, in particular, should look into comprehensive estate planning to protect both personal AND business assets.

I’m happy to help answer questions and/or connect you with an experienced pro to help with the rest.