The document detailing what should be done with a business after an owner’s death is called a succession plan. Before writing a succession plan, owners should speak to any co-owners; they should also consider drafting a succession plan together. Other considerations include whether to close or sell the business or whether to have someone else take over.
Estate planning includes researching different types of insurance coverage and determining whether to take out a policy for life or disability. Another type of coverage is key person insurance, which can attach to the business if the business is named as a beneficiary. Key person insurance could provide business expenses to someone taking over the business after an owner dies.
Individuals may also want to designate someone to make financial or medical decisions on their behalf if they become of unsound mind. These documents are called power of attorney. If a person wants to provide instructions on what medical treatment to provide in a near-death situation, such as a “do not resuscitate” request, this should be spelled out in an advance health care directive.
Not only does estate planning make things easier on a person’s spouse and children, it can also help them avoid paying certain taxes on assets through a trust fund. There are various types of trust funds that can be created, and an estate planning attorney can help clients decide which one is right for them.