If you own a small business, you probably spent considerable time and effort building it and making it successful. Now that it is thriving, it may be time to think about what might happen to your business when you die or if you become incapacitated.
Estate planning is about more than personal assets, beneficiaries and heirs. It can also allow you to protect your business from potentially devastating legal and financial challenges.
Outlined below are a few important points to consider.
Draft or update your will
Your will can include provisions that address your business, such as who will inherit your ownership interest and who will manage the company when you can no longer do so. You can also use your will to distribute percentages of your business interests to different beneficiaries.
Add a living trust
Since the Colorado probate process could expose your business to creditor claims and family disputes, it is wise to avoid it when possible. A living trust may shield your business property from probate and include instructions for managing it if you pass away or suffer incapacitation.
Create a succession plan
A business succession plan is a strategy that outlines how your business will be transferred and operated after your death or incapacity. It can help ensure a smooth transition of ownership and leadership while preserving the value and reputation of your business.
Of course, estate planning offers many other tools you can implement to protect your business and personal assets. You can make more comprehensive arrangements by discussing your concerns with an estate planning representative. Learning more about Colorado’s wills and trusts law can also help.