Company Owners' Estate Planning: Matthew Klieger

Estate planning is a crucial aspect of managing and preserving wealth, especially for business owners With the added responsibility of handling a company, business owners need tailored estate plans that address both personal and business-related matters. Here’s what to consider when structuring a robust estate plan for business continuity and financial security

Preserve Business Continuity

According to Matthew Klieger one of the primary concerns for business owners is ensuring their company continues operating smoothly in the event of their death or incapacitation To address this, business owners should develop a succession plan that outlines who will take over their responsibilities This plan may involve passing ownership to a family member, designating a co-owner, or appointing a trusted employee to take over. Setting up a succession plan provides stability for employees, customers, and business partners alike

Protect Assets and Minimize Tax Liabilities

Another crucial component is safeguarding assets from excessive taxation Many business owners use a trust to transfer business assets and other wealth to heirs, which can help shield these assets from probate and estate taxes. For instance, a revocable living trust allows the business owner to maintain control over the assets during their lifetime but passes the ownership to beneficiaries after their death, bypassing the lengthy probate process

Additionally, various tax-saving strategies, such as gifting shares of the business over time, allow owners to gradually reduce their taxable estate. Consulting with an estate planning

attorney who understands tax laws for business owners can help create a plan that maximizes tax efficiency.

Plan for Liquidity Needs

Business assets are often illiquid, meaning they cannot be easily converted to cash When a business owner passes away, their estate may face liquidity challenges to cover expenses such as estate taxes or debts. To manage this, business owners can consider life insurance policies specifically structured to provide liquidity For example, a buy-sell agreement funded by life insurance can give the remaining owners or family members the funds to buy out the deceased owner’s shares, ensuring that the business remains intact and that the deceased owner’s family receives fair compensation

Establish Power of Attorney

Business owners should also appoint a power of attorney to handle financial matters if they become incapacitated. A durable power of attorney grants a trusted person the authority to make financial and business-related decisions on behalf of the owner, ensuring continued operation in the owner’s absence This is essential for safeguarding both business interests and personal financial well-being.

Estate planning for business owners is more than passing down personal assets; it’s about ensuring that a business can thrive across generations. By carefully planning for business continuity, tax efficiency, liquidity needs, and financial oversight, owners can protect their legacy and provide a stable future for their families and businesses alike.