3 Estate Planning Tips for Small-Business Owners

For business owners, estate planning may seem like another task to do on a long to-do list. Having a solid estate and succession plan in place may be crucial to your business’s long-term success. If you are incapable of making business decisions, or if you unexpectedly pass away without an estate plan, your heirs may scramble to keep your business afloat.

Here are three tips that may make the estate planning process less stressful.

Begin With the Basics

When making an estate or business succession plan, start with a workable outline. Do not be afraid to set out a plan that still needs some fine-tuning. Put your ideas in writing. Even simple notes are better than leaving your loved ones without guidance and scrambling while dealing with emotional turmoil.

Some factors to consider when drafting a will and basic estate plan include:

  • Who would you like to run your business in your absence? Should this person be a full owner, part owner or simply a manager?
  • What framework would you like your heirs or loved ones to use to resolve business-related disputes in your absence?
  • Do you want to restrict business ownership to family members or allow others to invest?

Imagining the future of your business helps to make big-picture estate planning decisions.

Make Your Plans Tax-Efficient

An attorney may help you write a will and a business contingency plan but may not be the best professional to work on tax issues. A financial professional may work with you on the process of succession. The goal is to transfer your business with a strategy that manages the impact of state, federal, and local income taxes on the transaction.

Discuss Your Intentions with Those Affected

One of the biggest sources of friction in the business transition process may come from the hurt feelings of those involved. Interfamily disputes may come up from miscommunication or unmet expectations. If your child has counted on being tapped to run the business in your absence, only to see that you named someone else to this role, it can be tougher for your loved ones to rally together.

Even if you suspect that this discussion may lead to some conflict, it is important to communicate your intentions and plans with those affected by them. The time to work on these issues is before they are needed, not after it is already too late.




Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This article was prepared by WriterAccess

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Chris Marshall
Author: Chris Marshall
Chris Marshall is a Wealth Advisor with Fusion Financial Group, an independent financial planning firm and fiduciary based in Denver, CO. Located in Wisconsin, Chris has 15 years of experience in the financial services industry. At the beginning of his career, he specialized in both portfolio construction and real estate products, fostering a diverse understanding of investment markets. He is compassionate, motivated and hardworking, making him a natural fit as a Wealth Advisor within an independent financial planning firm. Chris focuses on coaching small business owners and new investors. Chris majored in Business Administration at Colorado State University. Since then, he has built a background in investment model design and securities. Chris received the designation of Accredited Investment Fiduciary (AIF®), a symbol of his dedication to upholding the fiduciary standard for clients. When not working, Chris spends time at home in Appleton, Wisconsin with his wife, Kayla, and two young daughters, Winnie and Marlee. Chris grew up in Colorado and is a rabid Denver Broncos fan that can trace his legacy season tickets back several generations!   Chris enjoys traveling, attending live concerts and watching just about any type of sporting event. To learn more about Chris, connect with him on LinkedIn.