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Caring For Generations

Your Business Needs an Estate Plan, Too

On Behalf of | Mar 31, 2021 | Business Law, business planning

“While it’s something you intend to do, you don’t know exactly what to include, so it sits unfinished…” Wendy Kneipp tells business owners in, referring to business planning. Your business plan ought to include the following, she adds:

  • a review of your book of business
  • a description of your vision
  • a description of your ideal clients
  • how much revenue you need for growth
  • your company financials
  • key objectives for sales, service, and marketing

While setting objectives is basic to the success of any business, much of business planning involves legal documents and agreements, and at Geyer Law an important part of our work involves the creation of documents, including business formation documents and business succession planning agreements. Business-related estate planning documents include buy-sell agreements.

For business owners, estate planning and business succession planning are intertwined, explain Dennis Amico and Paul Miller of Family Wealth Management in New Jersey, calling attention to two potential problem areas:

  • For many business owners, the two most valuable assets they have are their franchise ownership and their underlying real estate, neither of which is easily divisible among heirs. What’s more, real estate values need constant updating.
  • When a business owner becomes disabled, who takes control? Are there family members or company executives available and willing to continue operating the business? How can the value be preserved for the owner him/herself?.

“It is important to understand that the value of your business may continue to grow between the time you plan your estate and when you pass away,” Fidelity reminds business owners. At a minimum, there needs to be a business succession plan. That plan might include:

  • developing and training successors
  • appointing outside directors/advisors to bring objectivity
  • having a compensation plan for both family and non-family employees
  • using life and disability insurance to provide the money for successors to purchase the business

At Geyer Law, an important aspect of the services we provide involves business succession planning. Remember, your business needs an estate plan, too!

– by Rebecca W. Geyer