If you’re a business owner, a quick online will or low-cost legal plan might sound tempting – but it could create serious problems later. While these options are often marketed as fast and affordable, they usually miss something very important: making sure your personal estate plan works together with your business documents.
Your business isn’t like a car or a savings account – it’s a living, breathing operation with employees, customers, and a structure that needs special planning. If your estate plan doesn’t include your business, your loved ones could end up stuck in court, dealing with expensive delays or even losing the business you’ve worked so hard to build.
Why Basic Estate Planning Isn’t Enough for Business Owners
A generic estate plan might be fine if you’re only planning for personal assets. But if you own a business, your planning needs more attention. Many business owners don’t realize that their wills or trusts can conflict with documents like operating agreements or bylaws. And when that happens, things can get messy.
For example, your trust might say that your kids will take over your business, but your company’s operating agreement could say something else entirely. If those two documents don’t match, your family might face court battles, delays, and serious costs.
What Documents Should Be Updated?
If you’re a business owner, there are key documents that need to be reviewed and updated regularly:
- Operating Agreements (for LLCs): These must allow your business to transfer smoothly to a trust and clearly state what happens if you pass away or can’t run the business.
- Corporate Bylaws (for corporations): These should match your estate plan, including who will take over, how shares are passed on, and what happens in an emergency.
When these documents are out of date or not aligned with your personal estate plan, your business and family can suffer the consequences.
A Real-World Example
Let’s say Michael owned a small business. He created an estate plan to leave the business to his kids, with his brother as trustee. But he never updated the company’s bylaws after making that plan.
When Michael passed away, the bylaws still gave authority to an old business partner – someone no longer involved. This created a legal mess that cost Michael’s family more than $100,000 and nearly destroyed the company. His children were left with very little.
How I Help You Create a Plan That Works
When I work with business owners, I use a planning process called Life & Legacy Planning. This ensures your business and personal documents work together so your wishes are honored.
Here’s what we’ll do:
- Review your estate plan and business documents to check for conflicts.
- Update or create operating agreements or bylaws that allow your business interests to transfer smoothly to your trust.
- Include clear instructions about who takes over and how your business should run if something happens to you.
- Set up a buy-sell agreement if needed, to give your estate cash and protect the business.
- Review your plan regularly to keep everything current as your business or the law changes.
This isn’t something you should set and forget. Your plan needs to stay updated to work properly.
Protect Your Business and Your Family
You’ve worked hard to build your business – don’t let a cheap or incomplete plan undo all of it. When your business documents and your estate plan work together, you create a clear roadmap for your family and your successors.
The cost of doing this the right way now is far less than the cost of cleaning up a legal mess later. Let’s talk about how to protect your business, your family, and everything you care about.
We don’t just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love, starting with a valuable and educational Life & Legacy Planning Session. This will allow you to get more financially organized and make the best choices for the people you love. If you have already completed your estate plan, we will review that plan at your Life & Legacy Planning Session to ensure that it will work the way you intend and address any holes or gaps that may be present if circumstances have changed since you executed your plan.
To learn more about our one-of-a-kind systems and services, contact us or schedule a no-obligation 15-minute introductory phone call today.