Today we offer you part two of how small business owners should look at estate planning. Our estate planning tips focus on multiple types of people. Each client has different needs. Therefore, we always want to offer valuable information that might speak to your unique situation. When you’re a small business owner, your life is all about logistics. Since there are so many logistical factors to owning a small business, we couldn’t possibly fit all the information you need to need to know in one blog. Here is part two!
Consider a Buy-Sell Agreement as an Option for Your Estate Planning
A buy-sell agreement applies to a situation where a business has multiple key players or owners. A buy-sell agreement outlines who can buy an owner’s share of a company, details specific conditions, and names a price. When an owner passes away, it keeps the company in the existing owners’ hands. Typically, the agreement gives the current owners first buying rights according to a pre-set valuation formula. It also outlines when an owner’s ex-spouse has access to business assets after a proceeding divorce.
Buy Life and Disability Insurance
Life insurance is a must-have for anyone. It provides your family or designated beneficiary with a source of income when you’re no longer here. Funds from a life insurance policy can also ensure that your business stays afloat. In addition, disability insurance can offer the same advantages if you face short or long-term disability. Two types of life and disability insurances that will assist small business owners, which include:
- Personal life and disability insurance naming your family as the beneficiary
- Key-person life and disability policy, naming the business as the beneficiary
Figure Out a Succession Plan
We recommend that small business owners think long and hard about who will be their successor(s) or the heir to their thrones. A succession plan or continuity plan details how you plan to keep your viable business running and how to prepare for an ownership transition. Compare a succession plan to a business plan. You might list your target market, compensation adjustments for your core staff members, the business’s financial state (its profits, assets, and current valuation), and you might want to outline crucial training opportunities. Ensure that you align your succession plan with your will and other estate planning documents.
Other Brief Tips
- After finalizing an estate plan, discuss with your stakeholders or any affected parties.
- Update your estate plan when necessary because tax laws constantly change. Also, life events such as divorces or a child’s birth might affect your estate planning.
Does all of this information sound like a foreign language to you or at least a little complicated? No worries! Millman Law Group is always here to ensure that we’re attentive, attuned to your needs and that we make the estate planning process as smooth as possible.
An Estate Plan Made Easy With Millman Law Group
Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.