29 Dec Estate Planning Tips for Business Owners
As a business owner, your company is an important part of your legacy. You’ve devoted your life to establishing and maintaining a solid, sustainable business. Naturally, you want your business to remain in good hands. At Phelps LaClair, serving the Phoenix Valley, we care as much as you do about protecting your business. Please allow us to share a few estate planning tips for business owners, based on our 40+ years of experience.
Tip 1: Plan Ahead
As you know, several factors come into play when you start a business. Because there are so many variables, it’s important to plan ahead.
- Think about estate planning as soon as your business begins. This doesn’t mean you need to set up an appointment 40 years in advance! The sooner you meet with an estate planning attorney, the more prepared you’ll be.
- Find a respected estate planning attorney. Estate planning is almost always a complicated process. When you add a business into the mix, it becomes even more involved. That’s why the expertise of a professional estate planner can make all the difference for the future of your business.
- Expect issues to arise. Many people who begin a business venture plan the years ahead without accounting for roadblocks along the way. Obviously, no one can predict the future, but that’s all the more reason to have a safety net in place. The most successful business owners always plan ahead, in case of an emergency down the road.
Tip 2: Take Stock of Your Assets and Liabilities
As soon as your business is underway, become aware of what counts as an asset or liability. This is especially important if you’re the solitary business owner, because your business assets become your personal assets. Many people don’t realize just how broad the term “asset” is. You likely have many assets, not limited to:
- Financial assets. Cash, stocks, investments, and other financial matters.
- Legal documents such as deeds and titles.
- The buildings or land on which your company stands.
- Digital assets. Even though they’re not physical assets, digital accounts and documents that belong to you must be incorporated. Digital assets include social media accounts, online bank accounts, or cloud storage ownership and the documents within.
- Physical assets attributed to your business, such as furniture or a company vehicle.
Tip 3: Develop a Solid Succession Plan
A succession plan refers to the passing of your business onto whomever you choose. Choosing the successor of your business is one of the most critical decisions you’ll ever make. An estate planning attorney will help this crucial process run smoothly from start to finish.
- Develop a team full of partners you can trust. From the very beginning, only invite trustworthy people into your company. This will secure you with a team of beneficiaries you can trust.
- If your business is multi-generational, discuss the succession plan with your chosen family member as soon as possible.
- Create a buy-sell agreement with your attorney’s help. Several top businesses in the United States file buy-sell agreements in their succession plans. This document not only eases the process of succession, but clearly spells out the company’s assets, liabilities, and definitions of value.
If your business is owner-dependent—that is to say, you will not be passing it on—you should still have an established attorney on your side. Your estate planner will make sure all of your business profits and revenue are accounted for, and help you avoid liabilities.
Estate Planning for Business Owners in Arizona
At Phelps LaClair, the foundation of our firm is one of teamwork, family, and legacy—so we understand the pricelessness of your business more than any estate planning company in the Phoenix area. Our team is happy to help you develop an estate plan for your business to ensure your legacy is secure. Schedule your consultation today.
Image by Mohamed Hassan on Pixabay.