Estate planning is an important consideration for every small business owner, regardless of the size of their business or their personal wealth. This is because estate planning is not just about distributing assets after a person’s death – it’s about ensuring that a person’s wishes are carried out and that their loved ones are taken care of.
For small business owners, estate planning is especially important because their business is often their most valuable asset. Without a proper plan in place, the future of the business can be uncertain and even jeopardized.
To illustrate, take the example of “John,” a small business owner in Brooklyn. Tragically, John passed away suddenly, leaving his family and employees in shock. Without an estate plan in place, John’s business was left in limbo. John’s family was not able to access his assets, including the business, immediately. This caused financial strain for his family, who relied on the income from the business to support themselves.
As the legal process dragged on, tensions began to rise among John’s family members. Some wanted to sell the business and divide the proceeds, while others wanted to try to keep the business running. In the end, John’s family was left with a business that was worth far less than it had been when he was alive, and they were forced to sell it at a significant loss.
It didn’t have to be this way for John’s family. If John had had a proper estate plan in place, the outcome for his family and his business would likely have been very different. With an estate plan, John would have been able to specify what he wanted to happen to his business and other assets after his death. This would have provided clarity and direction for his family, who could have followed his wishes without the need for lengthy and costly legal proceedings.
John’s story is a powerful reminder of the importance of estate planning for small business owners. In short, every small business owner should consider estate planning as a critical part of their business strategy. It offers protection for their assets and their loved ones, and it provides peace of mind knowing that their business will continue to operate even after they are gone.