Each year, people throughout Pennsylvania decide to become small business owners. Owning a small business can be a great way to earn money while doing something you love. With that said, you can protect your business by creating an estate plan. Before doing this, here are a few estate plan considerations for small business owners.
Setting up a living trust
When you’re taking care of estate planning, you might also consider forming a living trust. With a living trust, you’re creating a legal entity that controls the future of your assets. This arrangement is also helpful for ensuring that your estate doesn’t have to go through the probate process.
Having a succession plan
Certain owners of small companies run family-owned businesses. If this is the case, consider creating a succession plan. With a succession plan in place, you can outline who will take over your company when you’re gone.
Creating buy-sell agreements
One of the best tips for a small business owner is to form a buy-sell agreement. A buy-sell agreement is a type of contract that’s typically formed between shareholders or business partners. This type of agreement focuses on creating a sale price if a business owner passes away. With a buy-sell agreement, a business owner controls who is and isn’t allowed to purchase part of their company.
Owning a sole proprietorship
There are several ways to form a business, one of which is as a sole proprietorship. While this arrangement might be beneficial now, it can be problematic for your family in the future. In a sole proprietorship, your business debt can turn into personal liabilities that get passed down to your family.
In conclusion, small business owners need to think about the future of their respective companies. If you need assistance in planning your estate, it might be wise to contact an estate planning attorney. With an attorney on your side, you won’t have to plan your company’s future by yourself.
