Should You Have an Estate Plan for Your Small Business?

If you have a small business, setting up an estate plan is essential. Estate plans can improve the odds of your business staying intact even after you are gone. Here are the basics of what an estate plan can do for your small business and how such a plan works.

Estate Planning

With a legitimate estate plan, you will have some control over what happens to your business when you pass away. If you want a child to take over the business or one of your business partners, you can specify this in advance. If you do not create an estate plan, your share of the business may have to go through probate court. At that point, it will be up to the probate judge to decide how to handle the distribution of your ownership in the business.

How Estate Plans Work

There are many different ways that you could use your estate plan. If you have a business partner, you could set up a buy-sell agreement. This is an agreement between you and your partner that the remaining partner will buy the other partner's share in the business. You could also set up your share of the business to pass down to a beneficiary directly.

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