The importance of estate planning for small business owners

On Behalf of | Sep 6, 2018 | Estate Planning

Every adult needs an estate plan, but for business owners in Nevada, an estate plan is particularly important. A will and other documents can help ensure that an owner’s wishes for the business are carried out.

The first step is to create a will. The will needs to name an executor and include information about who will run the business or take over the person’s share. Experts also say that a list should be kept of important files and accounts and how to access them. This information may be shared with the executor, business partners or others, and it may be stored online or on paper in a safe deposit box or safe.

Business owners also need to write a succession plan. This may appoint someone to take over the business, or it may specify that the business should be sold. This plan should be discussed with the individuals who will be involved in and affected by it. If a person is part owner, a buy-share agreement might be needed. This may specify who can buy the person’s share and what it will sell for. Finally, a power of attorney can appoint someone to take over financial matters. Without this, it may be necessary for the court to appoint someone for this responsibility.

There are several other important components to estate planning. For example, a last will and testament can name a guardian for minor children. A healthcare power of attorney names someone to make decisions about a person’s medical care. Beneficiary designations are another consideration. These forms, which are often filled out when a person opens a retirement account or a purchases life insurance, might be forgotten about when creating an estate plan. However, since they override instructions in a will or trust, it is important that they are consistent with the rest of the estate plan.