Owning a business and estate planning go hand in hand. There are so many things that can happen over the course of your ownership that you need to prepare for, and one of those many factors is your own health and capabilities. You need to make sure that your company can still function even when you cannot, or, in the worst case scenario, you pass away. There needs to be a succession plan to ensure your company’s continued survival and prosperity.
Power of attorney and a health care directive are two crucial ways to protect your business through your estate plan. The power of attorney allows you to appoint someone as your agent for financial purposes. He or she would work and act on your behalf. You can even limit the scope of the power of attorney so that you agent only makes decisions in certain situations or in relation to certain issues and assets.
The health care directive functions on a similar level to the power of attorney, except that this won’t relate directly to your business. The health care directive allows you to appoint an agent who makes health care decisions for you on your behalf. Make sure your agent knows your last wishes when solidifying your health care directive.
Last but not least, you want to have a succession plan in place for your business. Appoint people who distribute property, assets and stakes in the company in an appropriate fashion, and make sure your will clearly describes how you want your company to be distributed to your heirs and beneficiaries.
Source: Utah Business, “Safe and Secure: Every business owner needs an estate plan,” Peter K. Smyth, May 25, 2016
