Pennsylvania business owners should consider including a succession plan in their estate planning documents. A succession plan describes what will happen to a business if the owner becomes incapacitated or passes away. In preparing to draft a succession plan, business owners should speak with whomever they want to take over their business to make sure that person is on the same page; they should also discuss their plans with any business partners.
A business owner may alternatively decide that a business should be sold or closed down after his or her death, which should be stated in a succession plan. If an owner wants to keep the business alive, he or she should plan for any contingencies and ensure that whoever takes over will have enough money to run the business. One way to do this is by buying key person insurance and naming the business as a beneficiary. Then, if something happens to the owner, whoever takes over should receive some money for business expenses.
Other types of insurance to consider, when doing estate planning are life and disability, which can provide financial support for one’s dependents if that person dies or becomes injured and unable to work. Parents who want to pass their estate to their kids may want to look into how certain trust funds can be used to minimize taxes paid by the beneficiaries of the trust. One example is a grantor retained annuity, which can pass to beneficiaries with little to no gift tax.
Estate planning is not just for business owners. Anyone who has assets should consider creating a will or trust. An estate planning attorney can offer assistance to those looking to create or revise an estate plan.