The benefits of an estate plan

On Behalf of | Jul 7, 2020 | Uncategorized

Illinois business owners who do not have an estate plan should consider some of the benefits that an estate plan can afford their businesses and their loved ones. One component of an estate plan is a succession plan, which outlines how a business is going to be run or passed along if the owners become incapacitated or pass away. A succession plan should include whether a business will be passed on through the family, sold to a third party or closed. Alternately, a business owner who has partners may want his or her ownership shares to be sold.

Business owners may also want to look into key person life or disability insurance. This insurance is similar to life or disability insurance in that it pays out if a person dies or becomes unable to work, respectively, but it can include the business as a beneficiary. This means that if something happens to the owner, some business expenses could be covered by whoever takes over the business.

Another component of estate planning is a power of attorney. This can be either financial or medical, and it gives someone else the power to make important decisions in these areas if the person who created the power of attorney becomes incapacitated. Similarly, an advance health care directive lets doctors and loved ones know how a person wants to be treated medically in an end-of-life situation, such as when and whether to resuscitate.

Anyone could benefit from having a will or trust in place, but different estate plans work better for different people. For someone without many assets, a will could suffice whereas people looking for certain tax benefits for themselves or their businesses may want to consider a trust. An estate planning attorney may help someone determine which type of plan is right for them.