According to Forbes, there are nearly 28 million small businesses in the United States, and they employ more than 50 percent of the working population. Thanks to the advancements of the Digital Age, small business owners have millions of resources at their fingertips for starting, managing, and selling their companies. If you own a small business, you probably have done at least some research on your industry and what it would mean to sell the company, but what if something happens to you before you can retire?
As is the case with many aspects of business, it is important to prepare for all possible eventualities, which is why small business owners should create an estate plan. If you have not yet developed an estate plan, contact Solomon Richman P.C. to speak with a Long Island business lawyer about your situation. Call 516-437-6443 today to schedule a consultation.
What Should I Include in My Estate Plan?
Starting a small business is no simple endeavor, and keeping it afloat is even more complicated. If you’re like most small business owners, you’ve put your blood, sweat, and tears into your company, and you don’t want anything to happen to it if something should happen to you.
Just as you can draft an estate plan for your family, you can draw up a will for your business. According to the National Federation of Independent Business, there are several critical documents that should be in every business owner’s estate plan:
A Living Trust
In a living trust, you can dictate who will get the company’s assets in the event of your death. Unlike property in a will, assets that are part of a trust do not have to go through the probate process before the beneficiaries receive them.
A Buy-Sell Agreement
If you are not the sole owner of your company, you will need to include a buy-sell agreement in your estate plan. In such an agreement, you and your business partners can establish that if an owner passes, his or her shares go to the other parties for a fair price. A buy-sell agreement will prevent your loved ones from inheriting part of a business that they do not want, and it will prevent the owners from having to work with partners whom they did not choose.
A Succession Plan
If you are the sole owner of your business, you will not need a buy-sell agreement, but you will need a succession plan. In the succession plan, you can detail how you want your beneficiaries to manage or sell the company after you pass.
If you need to draft or update an estate plan for your business, contact Solomon Richman P.C. Our law firm has been serving businesses in New York for more than 55 years. Call 516-437-6443 to schedule a consultation with a Long Island corporate attorney.