It’s a scenario that ultimately befalls far too many businesses. An entrepreneur works for years, even decades to build a company—ratcheting its value from next to nothing to millions, even tens of million dollars over the course of a career.
But then that entrepreneur dies, perhaps suddenly and unexpectedly. The company incurs significant estate taxes. Its value is cut in half—the entrepreneur’s life work significantly diminished.
That’s obviously an undesirable scenario, and thankfully it is also an avoidable one: With the right estate planning, you can protect your company, your employees, and your legacy against all kinds of unthinkable and unintended results.
The Benefits of Estate Planning
Estate planning encompasses everything from wills to powers of attorney to trusts in order to position your business for a strong future, regardless of the external circumstances. There are several benefits that estate planning can give to your business—among them:
It helps prevents havoc. Should the owner of the company die, what happens to his or her equity in the business? With estate planning, you can ensure that those shares are automatically sold to other stakeholders or potential successors—reducing the chaos that tends to happen when a business owner dies.
It aims to position your business for longevity. Your brand and your legacy can move seamlessly from you to your successors, ensuring that the company stands for something from one generation to the next.
It seeks to minimize your tax burden. Grow your business—and pass it on to the next generation—while minimizing estate taxes and other tax burdens. A trust can be a great way to accomplish this.
It helps you put a succession plan in place. Finances aside, it’s important for your employees to know what will become of the company should you die unexpectedly. Estate planning helps you ensure steady leadership in all contingencies.
It provides the business owner with some options. Finally, a good estate plan can provide you with a sense of possibilities—a sense of when it’s alright for you to step aside from the company and perhaps enjoy a real retirement!
Start Estate Planning Today
The thing to understand about estate planning is that it can sometimes take years, even a full decade to get a good succession plan in place. That’s why it is important to start the process sooner rather than later, and begin reaping these benefits. Contact the Stonepath Wealth Management team today to begin a conversation about estate planning.