As I learned from hands on experience this summer, one of the most important steps a business owner can take is to ensure that their personal estate is in order, so that their failure to plan personally does not have a ripple effect on their business.
A shocking amount of families do not have their estate plan in place (one study by Caring.com estimate that 58% of adults in the United States don’t have a will or living trust- in other words, and estate plan).
More than this, recent cases in pop culture further highlight this issue. In the summer of 2018, Aretha Franklin passed away without a will, leaving an estate estimated at $80 million.
To be blunt: if you don’t, your assets will go through the state’s automatic procedure called “probate”, which is the state’s way of determining the where/whys/what’s and hows of how your estate will be distributed.
This means that your heirs (even if everything is amicable), will have to hire attorneys to represent themselves, and the process will take time. For example, Prince’s estate took his heirs years to settle his estate…which also means years of legal bills.
If an estate plan is so important, why not just use a cheap online service to draft up your will? For starters, you don’t want to have a will only. This subjects your remaining family members to the probate process discussed above. Second, I cannot tell you how heartbreaking it is to walk a grieving family through the process of having to go through probate to sort out what their deceased family member wished to have happen with their estate….except, said family member decided to go the cheap route. Cheap actions = cheap results. Something as important as your estate, and protecting your family when you’re not here to do so yourself, warrants critical consideration. Critical consideration occurs when you actually sit down with an attorney to get your affairs in order….not a computer program.
So what do you need have to have a satisfactory estate plan?
Finally, if you are a small business owner, you also must consider how your business plays into your estate plan, and into your estate planning. I’ll be breaking this down in detail in a later post, but for the time being, what questions do you have about the estate planning process? Email me at firstname.lastname@example.org.