For many New York business owners, their business is a huge part of their life. Many spend 50, 70, even 80 hours or more per week keeping their business afloat. In many cases, spouses, children and siblings help with the business. Therefore, it is important to have a plan in place should the main business owner become unable to operate the business anymore. This is where estate planning meets business planning.
A solid estate plan outlines what would happen if, for example, the father were to suffer a terminal illness and become unable to run the business. What will happen to the business? Will a family member take it over? If nobody is willing or able to take over the business operations, will it be sold? What if the family was hoping to sell the business years down the line to fund their retirement?
Estate planning, through wills or trusts, can help give business owners peace of mind should the unexpected occur. There are many options to protect a business owner financially. For example, insurance will provide funds in the event of a disability. These funds can cover business operating expenses as well as provide financial resources for family members.
Succession planning is something that small, family-owned businesses may want to consider. This type of planning outlines what will happen when a main player in the business becomes seriously ill, dies or retires. By choosing a successor ahead of time and providing that person with adequate training to run the business, small business owners can feel more secure in their future operations.
Source: Nevada Appeal, "Darcy Houghton: Don't forget business planning," Darcy Houghton, Feb. 5, 2013