If you fail to plan for the handling of your business after your death, the state steps in and decides for you. This could end in a way that does not suit your intentions.
USA Today explains you have multiple options for protecting your business through an estate plan. Whatever plans you make, ensure that you tell your loved ones or business partners about them. You want to be sure everyone knows the plan prior to your death so there are no surprises.
Succession plan
You might consider creating a succession plan. This plan lays out what will happen with your business in detail, including who will take over for you as the owner. It gives you the chance to prepare your successor for taking over the business. You can also determine how to divide shares if you want to leave the business to multiple people.
Life insurance
Buying a life insurance policy can be quite beneficial to your business. It can enable you to inject money into the business after your death to keep it running and help with the transition to the new owner or owners. You can stipulate the requirement that your life insurance goes towards business obligations.
Buy/sell agreement
If you have partners in your business, you can create a buy/sell agreement. The agreement will allow your partners to buy out your portion of the business instead of it going to your heirs or to someone outside of the business. This can enable your partners to keep the business running smoothly after your death.
