Updated: May 21, 2020
How do you prepare your estate plan if you are a small business owner or own multiple businesses, small or big?
Oftentimes, when families are thinking about an estate plan, the focus is mainly on setting up a Will and Power of Attorneys, but their businesses often get overlooked in the process.
If you are a small business owner and owns an LLC, an SCorp or some type of other corporation, you will need to ensure that your business is set up for success when you pass away.
You will need to make sure that your business has an Operating Agreement. The attorney who set up your corporation should have given you an Operating Agreement for your business with the other business legal documents. Review it to ensure that it includes an Operating Agreement.
Your business' Operating Agreement serves multiple purposes. One of those purposes is to identify what will happen to your business when you pass away. Depending on the type of business you own, you may decide that it will be inherited by your spouse, your children, or your business partner. There are many options to choose from. Talk with your estate plan attorney to determine the best course of action for your business.
YOUR WILL AND OTHER ESTATE PLAN DOCUMENTS
Your Will and other estate plan documents such as your Power of Attorneys, DO NOT dispose of your business assets unless you are a sole proprietorship. Check out this blog post on what your Will disposes of.
When you are preparing your estate plan, it's important that you lay out all of the property and businesses you own so you can prepare an estate plan for your entire estate.