Many businesses are dependent upon the owner to be there for daily operations. This includes medical practices owned by the primary doctor, law firms owned by one of the attorneys and some small service-based businesses. If your company falls under this umbrella, your estate plan will play a critical role in how things are handled when you pass away.
One aspect of estate planning that you have to think about now is what will happen if something goes amiss and your company is sued. For many owner-dependent companies, having liability insurance is the answer. If the business is terminated, continuing the coverage for a while might be beneficial. If you pass away, your loved ones should have a good idea of where the business stands from a protection standpoint. The formation of a limited liability company can help in this area.
In your estate plan, be sure you clearly denote what you want to happen with the business. If you intend that the business ends when you pass away or retire, document this. Having this in writing might help to protect your family members from having to cover massive estate taxes based on the worth of the business at the time of your death. This is helpful in case you pass away unexpectedly while the business is still up and running.
Protecting your loved one requires a comprehensive estate plan that takes your circumstances into account. Think carefully about your wishes for your assets, loved ones and business so that you can include all these in the plan you create.