Serious or fatal injury is a possibility at any time, which is why having a plan in place from the onset can protect start-up owners. The Conway Center for Family Business reports family businesses account for 64 percent of the United States gross domestic product.
Lacking estate planning while running a business may mean that key executives in a start-up will need to fight for their business rights if the ownership comes into question.
A lawyer will help a start-up owner determine how the business will be transitioned upon the owner’s incapacitation or death, such as whether the ownership is sold to someone outside the former owner’s family or passed on to a future generation.
Estate planning may also include stipulations for the support and training of successors, delegation of responsibilities, and transition plans for remaining employees.
A buy-sell agreement is a way to help ensure a smooth transition of your business and ensure your family's financial goals are met after you're no longer around to take care of them.
A buy-sell can also outline the terms of succession among the remaining partners, so that all terms are agreed upon in advance.A party the start-up owner never wanted to have ownership may gain it through the courts without estate planning.In cases where there are multiple start-up business owners, estate planning is especially important to protect each one.Estate taxes, court battles and arguments among shareholders at your business are likely not what you envision.If you are intent on growing your business into something whose value can benefit your family and loved ones, and you want to preserve the integrity of the business you’ve built, make sure to protect it by making an estate plan part of your business plan.As a start-up business owner, the excitement of starting a new business can place all the focus on new beginnings – how you’re going to create a sustainable enterprise, hire an amazing team, and evolve your product.What happens in the future isn’t always a consideration but thriving business owners know the immense value in estate planning.Among the many benefits is that your appointed trustee can take over management of your assets if you're incapacitated.A revocable trust streamlines the transfer of your assets by helping avoid potentially lengthy legal proceedings and costly court fees.If you have family or loved ones you want to ensure care for in the future, protecting your business is essential.Also, when a business owner dies, their legacy is not the only one that is affected.