Whether you started your company or inherited it from a family member, it may be more valuable than any other single asset included in your estate plan. Like any other particularly valuable asset, a business requires careful consideration.
Do you want it to remain open because you have a sense of responsibility toward your employees? Do you want your family members to sell the business assets and split the proceeds? Your goals for the business and the relationships you have with your family or employees will influence how to handle your company in your estate plan.
Rather than just including the business in your general pool of assets, you need to address your business and its assets specifically. If you don’t address what may be your most valuable property, you will leave the door open for significant conflicts later.
Do you have someone to run the company?
Just because you always dreamed of your oldest child taking over the family business when you retire or die doesn’t mean that they will. You may have to have a difficult and uncomfortable conversation with your children to see if leaving the business to someone is even a practical solution.
If you intend to have someone in your family or inner circle take over your company, you likely need a succession plan that explains the role they must fill and the training they require.
Do you want the business sold off?
Even if your plan is to have your executor liquidate the business or sell it off, you will still need to leave specific instructions. Do you want them to close the company and sell the property piecemeal if they are able, or do you expect them to sell the business as an entity to someone who will take over operations?
Different planning is necessary for different expectations, which is why it is very important to be honest with yourself and the people you love about your intentions.
Businesses may require special documents
More complicated documents may be necessary to handle complex transfers in your estate. You may need documents to transfer ownership. Adding a trust could be a good idea if you expect there to be a lengthy sale process or difficult transition. A trust can also be valuable if the business might put your estate at risk of estate taxes.
Addressing your most valuable property in your estate plan will help minimize conflict while leaving a legacy that reflects your values.