Owning your own small business in the metro Detroit area can be a source of pride and can be a lucrative endeavor that you want to pass on to your heirs or business partners. There are steps you can take in the estate planning process to ensure your dreams for your business will be met.
Assign someone to serve as financial power of attorney
A person with financial power of attorney has the authority to make financial decisions on your behalf if you become incapacitated. This may happen, for example, if you are in a coma or if you develop dementia or Alzheimer’s. It is essential that business owners have a financial power of attorney appointed. This is not just for their sake, but for the sake of their business.
Execute a living trust
A living trust is not the same as the type of trust you place assets into to pass on to heirs. A living trust provides instructions on how you want your assets handled and will name a person as trustee. This can keep your business running even if you are no longer able to run it yourself. A living trust is especially vital to those who own a sole proprietorship, as the business is not a separate legal entity from its owner.
Have a business succession plan in place
Succession planning is essential for any small business. It allows for the seamless transition of a business to future partners or owners once you pass. Business succession plans should be created while a person is still involved in the business and of sound mind. A business succession plan that outlines the transfer of the business between partners or from one generation to another can provide stakeholders with the security that once you pass a smooth transition will take place.
Estate planning is important for all in Southeast Michigan
Estate planning is important for everyone in Southeast Michigan even if they do not own a small business. With the right estate plan in place you can ensure your affairs are set in order and your final wishes will be met when the time comes.