Sometimes, Miami-area entrepreneurs are so busy living in the present that they don't have time to plan for the future. Between the immediacy of needing to keep the business running and keep the family functioning, business owners also think they can put off thinking about tomorrow until, well, tomorrow.
But experts say that isn't the case. A foremost responsibility for business owners is to make sure they go through the estate planning process to make sure that their business and other assets pass on just the way they want them to in the event of death, experts say.
Entrepreneurs should work with business advisers and attorneys to set the estate plan in motion, keeping spouses informed on what the plans are. Here are the three areas that must be addressed, experts say:
- Leave a succession plan in place for the business. If a spouse or family member will inherit the business, include that in the estate plan. If a business partner is to purchase the share of ownership, make sure a buy/sell agreement is in place so that heirs can receive proceeds from the sale of the shares. Business partners also might consider buying life insurance on the other to guarantee the partner has enough money to purchase the business shares from the estate.
- Assemble a team of advisers who will guide heirs through the takeover of a business. The team should include estate attorneys, insurance agents and accountants who can meet heirs and develop a relationship before they need to work together on an ongoing or emergency basis. Advisers caution that such estate plans should be put into place early to provide support to a spouse who needs to take over a business or make other decisions.
- Put a plan in place to protect family assets from creditors. The irrevocable trust is one tool to use to do so. Talk to advisers, as well, about creating family limited liability companies or a limited partnership.
Source: Forbes, "Preparing For The Inevitable: 3 Keys To Estate Planning For Female Entrepreneurs," Judith Schreiber Rowland, June 13, 2012