The Law Firm of Lan Quoc Nguyen & Associates
The Law Firm of Lan Quoc Nguyen & Associates

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Estate plan considerations for business owners

| May 11, 2021 | Blog, Estate Planning And Litigation |

Small business owners in California should consider what will happen to their companies after they retire or pass away. With careful estate planning, business owners may help ensure that the companies they have created will continue operating after they are gone. There are several types of estate planning documents that can help business owners make sure their businesses will last.

Estate planning documents for business owners

Business owners should engage in succession planning. This helps to determine who will assume control of a business once they retire or pass away. A succession plan should be in writing and clearly state the business owner’s wishes for what should happen to the business in the future. Business owners should also create a will or trust to pass the business and its assets to the people they want to receive them. A trust might be a good option because the transfer will happen outside of the probate process and be much faster.

Other important documents that might be created during estate planning include a power of attorney and a buy-sell agreement. A power of attorney grants the power to handle business operations if the business owner is incapacitated and unable to make important decisions. If the business has multiple owners, there should be a buy-sell agreement in place to allow the co-owners to buy out the interests of each other if one leaves or dies. Having term life insurance policies for each co-owner might allow them to have enough money to buy the other owner’s interest in the business.

Getting legal help with estate planning documents

With the right estate planning documents, business owners can have more control over what will happen to their companies once they retire or pass away. Having these documents in place might help the business continue operating in the future.