Do Business Owners Need an Estate Plan?

The correct answer is a resounding yes! Without an estate plan, the impact could be far-reaching. Why? In many instances, the business owner’s company is a primary source of income for the owner’s family members and employees who rely on the business’ continuity. Without an estate plan, there is no clear roadmap as to whether the company should continue to operate, and if it does continue to operate, how will it function without its key employee – you?

Protecting Individuals and the Wealth Created
In addition to protecting individuals, the estate plan protects the wealth that’s been created by the business. A business owner’s endeavors are often extremely lucrative, resulting in significant wealth creation. Without an estate plan in place, that wealth is exposed and becomes vulnerable to creditors and predators. If the business owner dies and leaves a simple will or, even worse, no will at all, the owner’s money and property will have to go through the probate court process.

The business may also be subject to substantial estate tax if the business endeavors have produced a significant amount of wealth. Without a proper estate plan, family members could lose out on a substantial portion of wealth to satisfy these taxes. However, tax-saving strategies utilized by business owners through a carefully considered estate plan can avoid this issue.

Possible Exposure via the Probate Court Process
The probate process involves administrating the deceased individual’s assets through the probate court. Probate is a public process that is reflected in court records that are accessible to anyone. This means that information about the company’s finances and property will be accessible to the public. In many circumstances a Living Trust can be used to avoid probate and protect assets for beneficiaries.

Provide Guidance & Establish Your Legacy
Arguably the most important reason to complete an estate plan is to firmly establish a legacy for loved ones by leaving guidance about how to run the business.

If you are a business owner who desires to leave an enduring legacy, making estate planning a priority is a must. Get started by contacting estate planning and elder law attorney, Daniel Kloos, 440.930.4001 or dkloos@dooleygembala.com.