A business owner needs an estate plan more than most
When people die without executing a legal will or trust, control over what happens to their estate is relinquished. South Carolina has its own laws, as do all of the states, for what is known as intestate succession. Distribution of assets of the estate follows the statutory scheme without regard to the decedent’s wishes.
Despite having significant assets and most likely access to financial advisers, many celebrity estates are handled intestate because of the individual’s failure to plan. When a business owner fails to plan, it is not merely ownership of the business that hangs in the balance but also the question of whether the business can continue to exist at all.
Experts recommend a three-pronged approach for a business owner – disability insurance, life insurance and a comprehensive end-of-life estate plan. By so doing, the individual’s family is protected against temporary events during the individual’s life, has immediate economic resources after the decedent’s passing and has an orderly transition for the future. This may mean preparing someone to run the business going forward or a buy-out depending on the type of business and the family’s needs and abilities.
At a minimum, a well-crafted estate plan should have a will, a trust, a financial power of attorney and a healthcare directive. A trust can fulfill many of the roles of a will but may reduce or eliminate the need and expense of probate. In addition, an estate planning lawyer can explain how investment accounts, bank accounts and insurance policies should be kept up to date with the desired beneficiaries properly named. Finally, the individual’s family should be made aware of the existence and location of all estate planning documents in preparation for the inevitable time.