Being an Ohio business owner is a special trust as you are part of the economic engine that keeps our state moving. You keep the economy going, people employed and nothing happens without you. This is why, when you estate plan, you likely want to put your business in there as well.
Is it needed?
Absolutely. Putting your business into your estate plan ensures that it avoids probate, which can cost your business time and resources. Plus, probate is very public. You can also minimize taxes and liabilities to your business, like protecting your business from creditors, lawsuits, preventing disputes between your employees, business partners and heirs. And, it lets you craft your business legacy.
How to include your business in your estate plan will depend on your goals, but a buy-sell agreement is one such option. This business contract is between you and your co-owners, or between you and your key employees, and it specifies how the business is valued, how it will be transferred upon your death, disability, retirement, divorce, etc. You can also include life insurance and other funding sources to provide liquidity to help with the transfer and ensure that your estate is appropriately compensated.
Trusts are another way to keep your business going when you pass. In this path, you transfer your business into the trust at some point while you are alive, or at your death. And, you name the trust who manages that trust, and as a result, the business.
You can use a will to outline how your business interests will be distributed after your death. However, this will be done through probate, and it may be challenged by creditors and anyone not happy with your decisions, like unhappy heirs.
Thinking about this now is a good thing. It means you are a good business owner and steward. Now is the time to be thinking about these things so that next, you can put these thoughts into action and put your business into your estate plan.