Small business owners in Tennessee should make sure that they have estate plans in place that specify how their companies are to be handled when they die. In situations where small business owners die without a will or an estate plan, what happens to the business that is left behind will be determined by the laws in which the decedent lived.
Preplanning is a necessary part of creating an estate plan, and entrepreneurs should be prepared to create more than just a will. Their estate plans should specify what actions should be taken with their families and assets in the event of incapacitation or death.
Disability insurance, which can replace as much as 60 percent of an individual’s income tax-free, should be considered. Life insurance also is an important component of an estate plan. It will be necessary to purchase a policy that would be able to cover the surviving family’s expenses fully for food, housing, education, clothing and more. Life insurance can also be used by small business owners to ensure that their businesses can continue to operate after they have died by having proceeds of the policies applied to certain company obligations.
Small business owners also have to consider who will take over their companies if they are unable to continue operating them. Creating a succession plan entails the grooming of a successor if the business is a sole proprietorship. With businesses that are operated by a family, individuals will have to determine the best way to divide their shares.
An estate planning attorney may consider the assets and goals of his or her clients and suggest which legal devices should be included in their estate plans. Assistance may be provided for the drafting wills and the provisions of trusts. A lawyer may explain the importance of including different kinds of powers of attorney.