If you are a small business owner, you have special concerns when it comes to estate planning that should be taken into account when you create your estate plan. As you have undoubtedly worked hard to build up your business, you should take care to ensure that it will not be lost or mishandled in the event of your death.
How you approach your estate planning with regard to your business will depend on a number of factors, principal among them is what business entity you chose for your business when it was formed. A corporation, for example, survives the death of a shareholder. A partnership, on the other hand, may or may not survive the death of a partner. A sole proprietorship, clearly does not survive the death of the owner. Which entity you formed for your business, therefore, will dictate, to a large degree, how you incorporate your business into your estate plan.
Regardless of which type of entity you chose for your business, however, you have a financial interest in the business that you likely wish to pass down to loved ones or family members. You may also wish to devise a business continuity plan that provides a legal mechanism for the business to continue even after your death. In that case, important decisions will need to be made regarding who will continue in your place and how to legally transfer ownership of the business upon your death.
The best way to protect your small business in the event of your death is to consult with your estate planning attorney.