Estate planning is important for everyone in Pennsylvania because this process is the best way to provide security for loved ones. A thoughtfully crafted estate plan may make it possible to minimize tax losses, avoid litigation and protect assets so that they can be transferred to heirs.
Estate planning is particularly important for anyone who owns a small business or helps to run a larger one as an officer. When a business owner starts making end-of-life plans, they need to make two sets: The first is a will to deal with personal assets, and arrangements need to be made for the business side of life with a succession plan.
The way a business owner plans his or her estate will depend, in part, on the way the business is set up. If a business is organized as a sole proprietorship, that means the business assets are the same as personal assets. Limited liability companies, or LLCs, are different. In that setup, the business is a separate entity. In an LLC, personal and business assets are separate from one another.
No matter how the business is organized, it’s always prudent to have a succession plan in place. A succession plan outlines what will happen with a business if the owner is unable to be present. It’s a good idea to write a succession plan when starting a business. That way, there is a system in place should there be an accident or injury.
Another document that can be very important for estate planning is a living trust. With a living trust, it’s possible to designate a trustee. This trustee will be able to manage someone’s personal and business assets in the event of disability or death. An estate planning attorney may explain to a client all of these aspects of a trust and help them craft the necessary documents.