For many successful entrepreneurs, the business they’ve built is a major financial asset and a defining part of their legacy. A clear, detailed estate plan can help support the transfer of your business, its assets and personal property in a manner that aligns with your goals and intentions.
Ideally, creating an estate plan starts with your values and goals. Before exploring strategies, take time to reflect on what matters most to you. A clear vision of your legacy can help guide the estate planning process and inform future decisions.
Don't miss: Our guide to help protect your business and legacy after you’re gone.
Questions business owners should ask when creating an estate plan
Start by considering these questions and discussing them with your Huntington wealth advisor as you build a plan that reflects your goals.
1. What if I had to leave my business today without warning?
Many business owners assume they’ll exit on their own terms. But life is unpredictable, and when or how you leave your business may not always be under your control. Even good intentions, such as wanting to have your children take over, can become more complex than you anticipated.
Think about where your business is today and what would happen if you experienced a disability and could no longer work. These considerations can help you identify and focus on long-term priorities.
2. What could disrupt my plans, and is the next generation ready?
Even with a clear vision, complications can arise.
Consider: Is the next generation prepared for leadership? Are your children or other heirs prepared to inherit your wealth? If something happened to you, would they have to sell your business at a discount?
Actions you take now could make it more likely that your family or other heirs can run or sell the business as you want them to, but it will take advanced planning. You’ll want to take practical matters into consideration: Will extracting the money you need for your next chapter leave the company short on liquidity? Do you have a successor in mind? Questions like these can help identify important planning considerations.
3. How can I protect my assets?
Your business may be vulnerable to competing interests – such as litigation, creditors or family dynamics. For example, you may not want an extended family member involved in operations. How can you ensure your business assets are preserved for the people you care about and your goals?
This question can help guide discussions with legal counsel about potential strategies for protecting the company from creditors, remaining tax efficient, ensuring that family members will handle wealth responsibly and more.
4. How can I treat all family members equally?
This may reveal a lot about your family dynamics. How would you like to compensate children who participate in the business, those who choose other careers or those who are from a previous marriage? If some in your family prove more responsible than others, does fairness mean equality? In many cases, fair may not be equal and equal isn't always fair.
This will be a decision that research and data can’t help with, but deep thought might. The goal is to arrive at a personal definition of fairness that your estate plan can reflect. Remember that those who carry on your business may have to live with the long-term impact of your decisions.
5. Who should I tell about my estate plan and when?
One of the most challenging aspects of estate planning is recognizing that you won’t be there to help your family after you’re gone. Knowing you have trusted legal, tax and financial advisors can alleviate some concerns. They can help you make a good plan and assist your family after you’re gone by facilitating the sale of your business or working to realize a succession plan.
Most people are reluctant to talk about their finances or estate plan. Bringing in objective outsiders can help you create a workable plan and take the weight of implementation off your loved ones.
6. What will my legacy be?
Your estate plan is a powerful tool for shaping how you’re remembered. Whether through charitable giving, business continuity or family support, your plan should reflect your values and vision. Your advisor can help you align your financial strategies with your legacy goals.
7. Who will safeguard everything I’ve built?
Choosing the right fiduciary is critical. While a loved one may seem like a natural choice, the role can be complex and demanding.
Having a professional fiduciary can alleviate some of the pressure and help ensure your wishes for your business, estate and loved ones are honored. In conjunction with your legal counsel, your advisor can help you determine a good fiduciary for your estate and, if you wish, Huntington can provide trustee services. This can provide confidence that your plan will be carried out according to your intentions.
