People who are in business for themselves are usually very driven individuals who stay focused and work hard. A business can sometimes take on a life of its own as it grows and constantly evolves, and there are times when the owner is kept very busy simply reacting to these ever-changing, dynamic circumstances.
Since the business does not stand still, it can be difficult to take a true snapshot of exactly where you stand, and that can make estate planning seem out of context and you may wind up putting it off. However, since a majority of your assets are likely to be tied to your business, you really can’t afford to take the risk of going forward day to day without a plan in place.
Estate planning for small business people is going to take different forms depending on the intentions of the owner. If you intend to pass the business on to the next generation of your family, you need to structure your estate accordingly. Will all of your heirs be participating in the ongoing profitability of the business? What roles will each family member play? If there are those who won’t be a part of the business, how do you want to provide for them in your estate plan? These are all things that you have to consider.
There are of course other people who do not plan to pass their business on to family members. They may make plans to have it sold after they pass, or in the case of owner-dependent businesses the death of the owner may signal the end of the operation entirely.
Clearly there is a lot for the small business owner to consider. It is easy to understand how people can be so absorbed in the ongoing challenges of running their businesses that an estate plan is the furthest thing from their minds. However, if you stop to consider what your family would be facing if you were to pass, you may feel motivated to take the time to consult with an estate planning attorney and lay the foundation for a smooth transition.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
- IRA Estate Planning: What Should a Beneficiary Expect? - August 2, 2022
- When Will You Put an Estate Plan in Place? - July 14, 2022
- Don’t Forget to Update Your Estate Plan - June 28, 2022
