Whenever you have to step away from your business for a few days, chances are you have a plan in place to ensure that operations run smoothly while you’re gone. Similarly, you also need to plan what will happen to the business after you pass on. If not, it’s time to look for solicitors near me and begin your estate planning as soon as you can.
Benefits of Estate Planning for Business Owners
You’ve worked hard to make a successful business, so you need to secure it in the event of your passing. Estate planning takes care of this for you, and also protects the welfare of any beneficiaries after your death. Here are some benefits that estate planning offers:
- Minimizes taxes
A major reason to plan your estate is to minimize the amount of taxes it will owe. Estate taxes can cost as much as 50% of the value of your business, and it needs to be paid a few months after your death.
If most of your business assets are not liquid, then paying this tax can result to selling your business altogether. Worse, small businesses are typically sold at a very low cost, way under their true value. Fortunately, lawyers in Bristol can help prevent your business from becoming a mere sale and help your loved ones keep it and benefit from the profits instead.
- Life Insurance
For businesses with several owners, the partners are left with no option but to purchase the deceased person’s shares after death. What if your partners don’t have available funds for this expense? Life insurance offers a practical way to provide this needed capital. This helps your partners substantial tax-free proceeds to buy out your shares from the estate and continue the business even when one owner is gone.
- Sole Proprietorship
If you’re a sole owner, then you already know that your personal assets are already tied with your business. This makes even more critical to plan your estate in advance.
For instance, you need to decide what will be used to cover any debt, who will be your successor, and if you want your business to be sold and the profits directed to your heir of your choosing. It will also help you avoid creating disagreements between your family members since there’s already a clear plan to follow.
- Family-run Businesses
Finally, local solicitors can help you pave the way for a smooth and simple of your family business after you die. How do you want to divide the assets? Some individuals want asset distribution to be based on how much their relatives contributed, and some want their children to receive everything.
Who would you like to take over the operations? Do you want your spouse to be the sole proprietor, or do you want to ensure that your children learn the ropes?
The death of a loved one causes so much heartache already, and it’s only compounded by a lack of estate planning when there’s a business in the equation. Save your loved ones the stress and sorrow by planning your estate while you can.
It’s not easy to talk about what happens when you die, but having your affairs in order is one of the greatest gifts you can give your loved ones as they deal with your loss. Contact your local solicitors today to receive guidance on estate planning for business owners.