Estate Planning For Business Owners

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Estate Planning For Small Business Owners

Our recent article on Family Business Succession Planning seemed to strike a chord with many of our clients. Not surprisingly what seemed to concern people the most, was what would happen to their business and family, if they were suddenly, unexpectedly unable to work. So we thought we would take a deeper look into some of the important aspects of Estate Planning for small business owners.

Business Structure

There are as many business structures as there are businesses. When starting the process of estate planning for your small business, you first need to consider your business structure. Whether it is a family run business, partnership, or a company structure, you need to determine how ownership and running of the business will work should you not be available. How the business is structured will impact any estate planning you undertake.

Succession Agreements

In our article on Family Business Succession Planning, we discussed the key steps you can take in ensuring your business continues to thrive if you are no longer involved. This type of agreement is not only essential to the continued success of the business, but will also protect your family and ensure they receive what they are entitled to from the business. You might like to think of this as a Will for your business.

Managing Risk

As with personal insurance, business insurance can provide a variety of protections for your business and your family. Most business owners require a combination of business expenses, key person, life, trauma & disability insurance, as a starting point. A good financial advisor will be qualified to provide you with advice on the best type and level of insurance for your business and personal circumstances.

Powers Of Attorney

Many small businesses can’t run effectively without the authority of the key decision-maker. This could relate to anything from arranging re-financing to negotiating new phone plans. A clear and concise Power of Attorney document will allow your business to continue to function if you are no longer in a position to work.

Wills & Trusts

We can’t stress enough how important it is to have a current and professionally drawn up will. Whilst any solicitor can draw up a will, there are solicitors who specialise in this particular aspect of the law. If you own a small business, are in a partnership, or have trusts of any sort set up, we highly recommend having a Wills & Estates specialist draw up your will.

And remember to have it updated whenever there is a change in your circumstances. Personally, this might be a marriage or divorce, the birth of children, children reaching adulthood or marrying, or even the need to care for elderly relatives. From a business standpoint, you should review your will if there is a change in your business structure or partnerships, retirement of key people in the business, or significant change in the financial profile or success of the business.

Who Can Help

You will need a range of professionals to ensure your estate planning is watertight, including your account, a specialist lawyer, and your financial advisor. Always remember, this is not a set and forget arrangement. Review all aspects of your estate plan regularly to ensure it has kept up with your changing circumstances and most importantly, as with a will, don’t leave this till it’s too late.

If you are an owner or partner in a small business and feel you need to put in place a structure to protect both the business as well as your family, should something happen to you, Manly Financial Services has the understanding and experience to help. If you would like to chat, give us a call on (02) 9976 3388 or contact us via the below link.


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