Preparing for the end of life is never simple. However, for small-business owners, complexity usually increases.
A typical estate plan often involves the future of a family. A business estate plan might involve the future of a much larger group.
1. Business succession plans
Although business succession plans are not the same as estate plans, they might share certain concerns. Most notably, they both have to do with the preservation of assets and the smooth transition of various responsibilities.
Business succession plans often complement personal estate plans. For example, a succession plan might advise on changes in corporate leadership while a personal estate plan distributed a leader’s private financial interest in a company.
2. Ownership structures and relationships
Business law might also become an aspect of some estate plans. These processes could make the business easier to transfer or manage after the death of an important figure.
For example, a sole owner might decide to change the business structure to some type of corporation or partnership. Businesses in which a single person managed most relationships might want to review contract and portfolio management policies.
3. Personal estate planning
Business owners also have their personal estates to think about. Some common tools include:
- Wills, which must have witnesses to be valid in Virginia
- Trusts to hold personal or business assets
- Advance directives to communicate end-of-life care wishes
These are similar concerns to many other types of estate plans. Therefore, some of the groundwork might be there; It might be possible to review and modify former planning instruments from before a person became a business owner.
Business ownership is a factor in estate planning. However, it is not the only one. A successful plan should build on solid strategies informed by unique, personal goals and the details of the case.