Legacy Assurance Plan: Business Owners | Plan Today to Help Ensure the Continuity of Your Business Tomorrow

Summary: If you are a small business owner, you may have spent your entire adult life sweating and slaving, brainstorming and stressing about ensuring that your business not only survives, but flourishes. For some, the historical legacy of that business may cover even more than your lifetime, possible spanning multiple generations. With all that effort, ingenuity, care and tradition on the line, why take a chance of letting everything fall into chaos when you pass? By planning ahead through proper estate planning, you can ensure that everything you’ve worked a lifetime building will continue to grow after you’ve gone just as it has during your years.

Successful business people have many traits in common. If you’re a business owner, chances are very high that you’re passionate about what you’ve built, you’re highly self-motivated and you have keen sense of vision. All of these traits should make you very driven to ensure that you get an estate plan and that the estate plan you acquire includes components in it that will protect your business from the drag of uncertainty and instability that could plague your business in the weeks and months after your death if you don’t plan.

With a proper estate plan, you can have confidence that your business (whether it’s a retail/service business or another type of endeavor like farming) will avoid this “doomsday” scenario of chaos after you die. A proper estate plan can help you protect your business in so many ways. In terms of the time period following your death, your plan can ensure that your wishes and preferences will be honored.

Your estate plan can include a succession plan that dictates what should happen to the ownership of your business after you die. There are many businesses where an owner or co-owner might want to dictate what happens to his/her ownership interest after death. Perhaps your business is co-owned by a small group of people. Alternately, perhaps you are a sole owner but you have a key employee you’d like to take over the business after you die. Either way, without proper planning, your ownership interest could pass in ways you don’t want. Your business could, for example, go to your child who, while responsible and loyal, has no familiarity or interest in your business. This could cause disorder, instability and harm to your business.

However, through proper estate planning, you can facilitate your goals and minimize the risk of problems. You can create what’s called a “buy-sell” agreement, which can facilitate the continuation of your business in various ways. Whether you want your ownership to pass to a new owner or to your existing co-owners, a buy-sell agreement can assist with that. Additionally, just like with your personal estate planning, trusts and insurance can help with your business-related estate planning. A life insurance policy placed inside an irrevocable life insurance trust, for example, can be one useful way to addressing liquidity issues that might otherwise exist when it comes time for the people you want to purchase your ownership stake.

Other trusts can also be helpful. If, for example, you want to transfer your interest to your children while at the same time retaining an income for yourself, this can be accomplished with trusts like the grantor retained annuity trust (GRAT) or the grantor retained unitrust (GRUT.) While those names may sound intimidating, they simply represent tools in your estate planning attorney’s toolbox that can make sure that both your individual and business are realized in the most efficient and beneficial way possible, facilitating the succession plan you desire while also maintaining your personal financial stability.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.