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Ways of incorporating your business into your estate plan

On Behalf of | Aug 5, 2022 | Estate planning |

If you own a company, you need to include it in your estate plan. These documents solidify what will happen should you expire or become incapacitated.

There are various tools available when building an estate plan. The following legal mechanisms limit the amount of struggle your heirs must endure.

Living trusts

These arrangements are like wills, though they offer different benefits. A living trust can cut estate taxes and legal expenses. Named family members gain immediate access to your business and its assets after you die. The individual you want to take over may assume control as soon as necessary.

Buy-sell agreements

Your venture may have more than one owner or beneficiary. Write a decree stating who has the right to buy your share of the operation. Heirs will have flexibility on whether they want to control the business or get bought out.

Succession plans

Entrepreneurs often have specific ideas about what should happen with their corporate creations. An estate planner can help outline your wishes, allowing for a smooth transition of power. You may also include guidelines on how you would like the business sold.

Life insurance

Those you love will need financial sustenance in a time of flux. A life insurance policy provides necessary dollars during that period. The money they receive can help fulfill pressing operational obligations. Examples include payroll and satisfying debts.

When writing your estate plan, consider what you wish to happen with your business. The work you do today reduces heartache bearing down on your heirs tomorrow.