California business owners often have a tough time keeping afloat, especially in expensive cities like San Francisco. While owners may know what to do if their revenue drops, few think about addressing long-term success that outlives them. Creating an estate plan is a good way to force yourself to think about what you want for your businesses and family should you become ill or pass away.
Anyone with assets or a business should consider whether to put those assets into a living trust. A revocable living trust, which can be changed during the trustor’s lifetime, gives power to a trustee to control assets before they are passed on to beneficiaries. This is particularly useful if the beneficiaries are not old enough to inherit assets or take over a business at the time the trustor passes away.
A business owner should also consider getting life or disability insurance. This will help your loved ones should you pass away unexpectedly or become unable to work. Another good option is key person insurance, which can help business successors cover business expenses.
Other documents that can be included in an estate plan include medical and/or financial power of attorney, which give another person control over medical or financial decisions in the event of incapacitation. An advance health care directive can be used to provide medical instructions for end-of-life situations.
Your estate plan may also include a succession plan for your business. Before working with an estate planning attorney, decide whether you want to keep your business in the family or sell it. Either way, legal counsel can help you prepare the necessary documents.