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Heritage Tree LogoWhat Should a Business Owner Include in an Estate Plan?

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You may already have estate planning documents in place so that you may pass down your personal possessions to your loved ones. But if you are a business owner, you must also consider how this is going to be succeeded. Read on to discover what a business owner should consider in their estate plan and how one of the seasoned Butler County estate planning & probate attorneys at Heritage Elder Law & Estate Planning, LLC can point you in the right direction.

As a business owner, what should I include in my estate plan?

As a business owner, arguably the most important thing you can establish in your estate plan is a business succession plan. This is a legal document that allows you to offer step-by-step instructions as to how you wish to change the ownership of your business, should you become incapacitated or otherwise pass on. Essentially, it may offer your employees some stability during this trying time, all while allowing your successor to take on this responsibility as seamlessly as possible. Without further ado, your business succession plan should consist of the following elements:

  • A succession timeline: this entails information on when a succession would take place, with even a specific date in consideration.
  • Your prospective successors: this entails a list of individuals whom you trust to inherit your business, in a ranking of consideration.
  • Formalized standard operating procedures: this entails a collection of any relevant business documents, such as your operating procedures, training guides, employee handbooks, etc.
  • Your business valuation: this entails information on how much your business is worth, what method was used to measure this, and when this was last measured.
  • Your succession funding: this entails information on whether this succession will be funded by your life insurance policy, a seller’s note, or otherwise.

What other estate planning documents should I consider?

In addition to establishing a succession plan, it may also be in your best interest to consider the following estate planning documents:

  • A buy-sell agreement: this is so shares of your business may be purchased at a fair price by existing business partners who wish to inherit it.
  • A life insurance plan: this is so your existing business partners may have enough liquidity to purchase shares of your business.
  • A living trust: this is so your shares of the business can be protected from the probate court and instead easily transferred to an existing business owner.

As you may likely conclude yourself, creating a business succession plan and other estate planning documents can become complex. However, you must tackle your estate planning documents as soon as possible. So call one of the competent Butler County estate planning attorneys from Heritage Elder Law & Estate Planning, LLC today.

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