Negosentro.com | Estate Planning to Protect Your Business | If you own a business, whether it is large or small, there’s a good chance that it is one of your most valuable assets. For most people, a business isn’t just how they get their money – it is the result of years of struggling towards a dream and ambition. Because of that, it’s important that you think about what should happen to your business in the event of your death. Whether you have extensive company assets, trade secrets or a particularly unique management style, if you want your business to continue as your legacy, estate planning is a good idea.
What Is the Purpose of Estate Planning?
Estate planning is much more than just sitting down and will writing (although a Last Will and Testament is included in estate planning). Estate planning is there to protect your business in any situation, whether you or your partner passes away or decides to move on from the business. For example, a common approach to this is a buy-sell agreement. This agreement is a formal document that indicates procedures that happen when a company’s partner dies or even just decides to sell their share of the company. Is there a successor to that partnership or does it just get dissolved? How should the company be run? Estate planning can have a wide scope and can get quite eccentric at times – for example, Jeremy Bentham, the founder of University College London, insisted on having his skeleton present in board meetings once he had passed away.
Estate Planning for Businesses with Two or More Partners
Estate planning when your business has two or more partners requires well-intentioned cooperation. The solution that you all might come to might be to choose a successor – this could be someone who is currently working in the company or a descendant of the deceased partner. The person chosen will usually need to be both the personal choice of the particular partner and in the best interests of the company, as most partners are not too accepting of nepotism, which can have serious impacts on the health of the business.
Time to Assess Your Assets
Estate planning can be a very welcome opportunity for you to analyze your business assets. If you liquidated literally all your assets – even your office furniture and ergonomic management keyboard – what would be left? What would you want to happen in terms of liquidation? Would that be a last-ditch resort? What about the business relationships that you have spent years nurturing and that probably helped to keep essential processes ticking. If you are the sole proprietor of the business, you might forget that many password-locked assets can be frozen in the event of your death.
A good and well-thought-out estate plan can protect everything that you have built in your business and can make sure that your years of hard work continue to provide success to your company members once you or one of your partners moves on, whether that’s planned or unforeseen.