Everyone should do end-of-life planning. If you own a business, it becomes more complex. Here are some things that Iowa business owners should be aware of when completing their estate planning.
How is estate planning for business owners different?
Estate planning for business owners needs to include not only disposition of their personal assets, but a clear plan for either the disposition of their business assets or plans for its continued operation.
Business owners should consider what will happen with their business in the long term, along with any potential issues that may arise. Regardless of your business model, be it a sole proprietorship, a partnership, or family-owned business, it’s never too soon to begin estate planning.
What are the steps I should take when estate planning?
Don’t leave the disposition of your assets to chance, especially if you own a sole proprietorship. In that scenario, your business assets are your personal assets. Begin by preparing the proper estate planning documents, which include your last will and testament, a living trust, financial power of attorney, medical power of attorney, advanced health care directive, and business succession plan.
How these documents are prepared, vary based on the unique qualities of your life, and are impacted by factors such as the legal structure of your business, whether you are married, or if others co-own the business with you.
What is business succession planning?
Business succession planning is a plan for the continued operation of a business. Do not assume that just because your business is a sole proprietorship that it cannot live on after your death. It’s entirely possible that you might want to bequeath things such as your equipment or customer data to a relative or close associate upon your death so that they may continue operation of your business.
Succession planning is especially important in family-owned and operated businesses. A clear business succession plan will alleviate disputes between surviving relatives and allow you to make your wishes known.
Properly executed estate planning can provide you with peace of mind. An attorney can assist you with these documents.