Ten Fatal Mistakes Business Owners Make – No. 7: Failure to Create and Update an Estate Plan

You know the old saying is true:  Nothing is certain but death and taxes.

While you may know when the tax man will come, no one knows when their time on earth is done.  That’s why you need an estate plan, particularly if you own a business.

A few years ago, a young widow came to visit our office.  Her husband — a young, strong, active man — had been killed unexpectedly in a freak accident.  He left behind a widow, two young children, and several business ventures.

Her husband had purchased life insurance to fund a buy-sell agreement, but the agreement could not be found.  And her husband’s partner was being less than helpful with the transition in the businesses.  After many months (and thousands of dollars in attorneys’ fees), our office was able to extricate her from the business ventures.

The widow is now a vocal champion for estate planning.

If you don’t have an appropriate estate plan, your heirs may pay unnecessary taxes when you die.  Your heirs also may be forced to sell your business if you have not coordinated your estate plan with your buy-sell agreement or if you have not adequately funded your buy-sell agreement.

If you own a business, you must have an estate plan that is tailored to meet your specific needs.  Regularly review and update that estate plan to make sure it is still applicable.

If you experience any major life changes – marriage, divorce, birth of a child, or death of a spouse or child – update your estate plan immediately.  If you don’t, your estate may not end up where you want it to go.

Or your heirs may have to clean up the mess you left them.

Show Buttons
Hide Buttons