Thinking about the future of your business as an entrepreneur can be mentally tiring. It can be anxiety-inducing to picture a day when you might not be running your business. Not only that, the day-to-day of your business operations may be consuming all your time. Unfortunately, estate planning for your business isn’t something you can ignore. If you’ve worked hard to create and grow your business, the only way to make sure it is taken care of after you’re gone is to think critically about the business’ future. Luckily, there are ways to make this process easier. Handling each piece of your estate planning step-by-step will make it manageable. Here, we’ll go over ten essential estate planning tips for you as a business owner. 10 Essential Estate Planning Tips For Business Owners Finalize your decisions about the business’ future. Organize and update your records. Speak to all parties who will be impacted by your choices. Get your life and disability insurance in order. Decide whether you need a Buy-Sell Agreement. Assess the tax situation for your business. Create a will. Set up an estate plan. Draft a succession plan. Plan for updates to all your documents. 1. Finalize your decisions about the business’ future. Before you can do any drafting on your estate planning documents, you should take the time to think about your decisions. You’ll have many questions to answer, such as: Who should inherit the business? What if your first choice doesn’t want to continue the business? Are your kids interested in inheriting the family business? Do you need to set up a trust? Where can you find reputable attorneys and financial advisors if you don’t have a team already? How will the business transition after you aren’t at the helm anymore? These questions may not be easy. But they need answers so you can begin setting up your comprehensive estate plan. 2. Organize and update your records. If you are the only person that knows where your business records are, the people who take over will have a hard time. Take some time to locate and organize your business files. If you don’t have an easy filing system, fix that now. Some of the important records for you to maintain and arrange for your successors are as follows: Your business plan State-filed documents, such as Articles of Organization or Incorporation Your Operating Agreement, if any Financial records and statements Tax returns Insurance policies 3. Speak to all parties who will be impacted by your choices. Plan time to have conversations with all parties involved in your estate plan. Although many people first draft the documents and then tell the affected parties, it’s better to do it the other way around when a business is involved. At this stage, you’ll get an understanding of who may not want to take on the roles you had envisioned for them. You’ll also find out if there are any parties you missed who would be willing to handle more responsibility. Beyond that, you’ll be able to clue your family into your wishes, which is an integral part of all estate planning. 4. Get your life and disability insurance in order. As a business owner, you’ll need to think about how to provide for both your family and your business when you’re gone. Life insurance is a good idea for anyone planning their estate. For business owners, it becomes even more critical, because it could lead to a significant financial payout when your family needs it most. You should also consider purchasing disability insurance, as it can help if an unexpected disability comes up. Apart from purchasing general life and disability insurance and naming your family as beneficiary, you’ll also want to purchase a different type of life and disability insurance policy for your business. This is called a “key person” policy. With a key person policy, you can name your business as the beneficiary. These policies provide payouts when a “key person” in the company passes away or experiences a disability. This money could be very valuable for your small business. 5. Decide whether you need a Buy-Sell Agreement. If your business has multiple owners, you may need a Buy-Sell Agreement. A Buy-Sell Agreement is a document through which the owners of a business come together and decide what happens in case one of them can no longer participate in the company. Generally, the current owners have a right of first refusal on purchasing any ownership interest that has become available. A Buy-Sell Agreement can be very complicated, however, so it’s a good idea to get an attorney’s help. 6. Assess the tax situation for your business. At this stage, you should sit down with an accountant and tax attorney to discuss how you can best insulate your family and your business from an unreasonable tax burden. The right team can help set up your estate so that inheritance and estate taxes are minimized. You may also wish to discuss any long-term savings accounts or special investments you have. These will also have to flow to your family quickly and efficiently when needed. 7. Create a will. Now, this stage is where the heavy lifting of estate planning begins. After you’ve made your decisions, it’s time to draft your will. A will memorializes the decisions you’ve made for your estate. Without a will, your property would be passed down based on the laws of your state. Not only that, but without a will, your property can get tied up in probate for months on end (if not years!). A will isn’t a document that you should handle alone. An experienced estate planning attorney can make sure everything is as you want it to be, as well as counsel you along the way. 8. Set up an estate plan. Drafting a will is only part of planning for your estate. You must also have a Power of Attorney and a Healthcare Directive. A Power of Attorney gives another party the right to…