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An estate planning lawyer can also make recommendations to start-up owners to secure protection through means like life insurance, which further helps to protect business assets.As a start-up owner, you likely have a vivid vision for the state of your business today and far into the future.
As well, legal proceedings can take years to go through, which can damage the production of a business or shut it down altogether.
Estate planning should be a part of the business formation plan from the very beginning, or as soon as possible when the business owner realizes its importance.
Estate taxes, court battles and arguments among shareholders at your business are likely not what you envision.
If you are intent on growing your business into something whose value can benefit your family and loved ones, and you want to preserve the integrity of the business you’ve built, make sure to protect it by making an estate plan part of your business plan.
Here, we will discuss the four key components of estate planning to make sure you are well set up for success.
The most fundamental estate planning tool is a will.Estate planning helps minimize taxes and costs that are associated with business ownership transfer.It also helps ensure that the right parties move on to handle the business in case a partner passes on.A properly executed will, gives clear direction to your executor about how to manage or distribute your assets when you pass away.Then, a somewhat more complex component of an estate plan is a revocable trust—this is a legal entity created to hold your assets while you're alive.A buy-sell agreement is a way to help ensure a smooth transition of your business and ensure your family's financial goals are met after you're no longer around to take care of them.A buy-sell can also outline the terms of succession among the remaining partners, so that all terms are agreed upon in advance.A business partner that does not have an estate plan in place, and whose partner passes on, may find themselves suddenly doing business with their deceased partner’s family.This can result in tension and dissolution of the company. An estate planning attorney can assist start-up owners in the estate planning process.Companies that grow to employ several or even thousands of employees will need to ensure those workers are protected.Here’s what small business and start-up owners should know about estate planning and how to start the process.