The entrepreneurial spirit of many Americans has led to the creation of a number of businesses across the nation. However, many of the small and large businesses in Michigan could be in jeopardy because the owners have forgotten to take care of estate planning.
A survey of 600 high net worth people conducted by U.S. Trust found that a large percentage of business owners, 72 percent, were concerned with creating jobs and keeping their employees working. Approximately 55 percent had made significant investments in their businesses since 2008. However, a good number of them failed to plan for a future when, for one reason or another, they might not be able to run their businesses.
About 55 percent of surveyed business owners did not have a succession plan in place, and 6 out of 10 business owners did not have a comprehensive personal estate plan in place. Some did not even have simple wills or durable power of attorneys on file. Another 48 percent did not have trusts set up to pass assets to heirs.
Although estate planning can be challenging and overwhelming, it is critical that business owners take time to do it or risk having all of their hard work compromised in the future. Something as simple as formal succession documents detailing who will take over the company can ensure the business continues to operate smoothly despite the loss of its founder. Wills can minimize bickering over assets and other inheritance issues.
There is a great deal of information available about estate planning. Talking to an experienced estate planning attorney is a good way to get started planning for a business' future.
Source: DailyFinance.com, "U.S. Trust Survey Finds Majority of Business Owners Focused on Keeping People Employed and Creating," Nov. 9, 2012