Estate planning is not just for the wealthy. It’s not only for millionaires or those with mansions. It is for every person who owns anything they wish to pass on to someone or an organization after their death. And, if you’re an entrepreneur, it’s likely you will be bequeathing countless items to others beyond your clothing and furniture. You might pass on a vehicle, a home, life insurance and even the inventory of your business.
A good place to start to ensure you control who gets what after you die is a valid Last Will and Testament. Every state has its own probate laws dictating inheritances, gifts and wills. That means it would be wise to consult with an attorney licensed in your state
Why is it important for a Last Will and Testament to be valid? According to Robert B. Walker, an estate planning attorney in Virginia, “In every state, if you have a valid will, it will control” the manner in which a person’s assets are distributed upon their death.
Also, says Walker, it is imperative to retain business and personal assets separately. That prevents personal funds being used for corporate debts. A business owner does not want to “stick (one’s) personal estate with corporate debt,” he says.
Walker reminds entrepreneurs that estate planning also calls for strategizing what would happen to the business should its owner become incapacitated . Those decisions include who will have access to the company’s internet passwords, bank accounts and anything else needed to keep the lights on while the owner is incapacitated.
“Even if you’re incapacitated, the business still goes on,” he says.
Because small companies have fewer people to rely on when an emergency strikes, it is wise to plan ahead for the unforeseen.
Another component of estate planning exists that is often overlooked. Business owners would be well-advised to have Durable Powers of Attorney signed and ready to go should they become incapicatated. That way, someone they trust will be empowered to act in their stead during the illness. When a power of attorney is not “durable,” the power is voided when the grantor, meaning the person who gave the power, becomes incapacitated.
Other advanced directives includes a Living Will and a Health Care Power of Attorney.
Tami Kamin Meyer is an Ohio attorney and writer who tweets as @girlwithapen.