Key Takeaways:

  • Saling Wealth Advisors can help you develop the proper strategy to ensure you are building a comprehensive estate plan for your family and business.
  • Life is unpredictable. Creating an estate plan that covers both your business and personal assets is better to prepare now vs later.
  • Communication of your plan now can avoid conflicts later.
  • Business estate planning elements to consider: wills, trusts, POAs, succession plans, insurance, and a strategy to minimize estate taxes

It is not uncommon for business owners to thoroughly think through the management of their personal assets yet neglect or delay the same planning for their business assets. Afterall, most businesses are a separate entity and usually a distant afterthought in the management of one’s comprehensive estate planning. However, there is no time like the present to develop a strategy and execute a plan to manage and include your business assets in your estate planning.

Many of our families at Saling Wealth Advisors include business owners, whether operators of a family-owned business or co-owners of a business with nonfamily members. In addition to helping to establish or review an existing estate plan for clients, one of the first questions we ask when meeting with new client business owners is whether they have included their business in their estate plans. Typically, the answer is no.

Most recently in the onboarding of a new family we asked this question, and the answer was somewhat predictable, “No, I haven’t yet, but I plan on doing that in the next year or two when I get around to it!” Unfortunately, we all know how unpredictable life is! Through our insistence and guidance, we were able to help our new business owner client begin that day to think through the critical elements of their business and develop an estate plan to include their business assets.

If you are in the same boat or wondering what are the key elements that go into an estate plan for your business, here are a few key questions that can help you begin to make a checklist of items that should be included:

  • Should you pass away unexpectedly, who does the business pass onto? Family? Co-owners? Don’t leave this to chance by ensuring you have a Last Will and Testament in place.
  • Have you established a trust (revocable or irrevocable)? It is important to name a trustee to manage your business assets on behalf of your beneficiaries in case you become incapacitated or pass away.
  • Who will make financial or medical decisions on your behalf if you can’t? Power of Attorney (POA) estate planning documents allow others to make financial and medical decisions when you are unable to.
  • In the event that you do pass away suddenly, who will take over the business – a business partner, a family member in the business or outside the business, or will the business sell to a third-party buyer? Succession Planning should be a key element of regular discussion and should be kept up to date in a succession planning document that others have access to.
  • How will both personal and business expenses be covered should you die or become incapacitated? Insurance – life, disability, and key-person – that names the family and/or business as the beneficiaries can help cover unexpected expenses in light of tragedy.
  • Would you ever knowingly leave your heirs with a significant liability on their hands upon your death? 99% of people would most likely say they would choose not to. By establishing a revocable or irrevocable trust these steps can help to significantly minimize the amount of estate, inheritance or gift tax paid by your heirs upon death.

When is the best time to establish an estate plan for your business? Now is the best time. We all know that life is unpredictable and can change at any moment. Clearly communicating your desires and thoughtfully planning can alleviate a lot of stress and conflicts in the future for your family and business partners.

If you have any questions regarding the inclusion of your business assets as part of your estate plan, please contact a member of the Saling Wealth Advisor team and we will be happy to help you think through and develop a comprehensive financial plan for your family that includes both personal and business assets in your estate planning.

Tendai Charasika

Chief Strategy Officer

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This material is not financial advice or an offer to sell any product and is not a recommendation to buy or sell any particular security. The opinions expressed are those of the Saling Wealth Advisors’ Management Investment Team and are subject to change without notice.

Saling Wealth Advisors (“SWA”) is an independent SEC registered investment advisor. Registration does not imply a certain level of skill or training. This material is provided for informational and educational purposes only. More information about SWA including our advisory services, fees, and objectives can be found in our Form ADV Part 2A, which is available upon request.

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