Estate planning is the process of preparing your business and your family for what happens when you pass.
Although it may be difficult for some, every business owner should consider creating an estate plan as soon as possible. It gives you, your partners, and family peace of mind knowing that your business will continue to thrive, and your assets will be in the hands of people you trust.
Whether you have started estate planning or not, knowing these common mistakes could help avoid stress and confusion once it’s time to implement the plan.
1. Failing to choose a successor
This is the most common mistake many entrepreneurs make. While succession planning is different from estate planning, it would help to name a successor for your business in your estate plan. Otherwise, you may lose control of who ends up getting your business.
2. Failing to consult an estate plan expert
Estate planning involves more than just writing your will and distributing your estate. Working with an expert ensures you don’t forget any aspect in your estate plan.
Here at Kidmans Partners, for instance, we offer assistance in a range of areas of estate planning, such as:
- Discussion of your objectives for your estate
- Acquiring court approval for a grant administration
- Checking valuation of your assets and inventories
- Paying debts and taxes
- Preparing all documentation required for estate planning
3. Not updating beneficiaries
Who gets what becomes a bit confusing when your will says one thing and your policies say another. Remember, certain assets like your life insurance, annuities, and retirement benefits have a beneficiary designation form. Ultimately, the names that appear on these forms will be the ones that will inherit your assets.
Make sure to update your beneficiaries if there are changes down the road.
4.Failing to update assets
Similar to your list of beneficiaries, asset ownership should also be reviewed when creating your estate plan.
5. Leaving your company share with your business partners
While this could be the most natural thing to do for some business owners, leaving your company share to your business partners isn’t always a good idea.
You’d want your family to enjoy the fruits of your hard work. Leaving your business partners to decide who gets your share doesn’t guarantee that some would go to your family.
The best way to handle this is to work with an estate planner. You could create a buy-sell agreement to set how your share is distributed and how your family will be compensated for it.
6. Not updating your will
Changes could happen in your business and family from the time you wrote your will up to the time that the will needs to be implemented. Consider looking into your will every once in a while to make sure it’s up-to-date.
With the right professionals to help you, estate planning is simple and easy to accomplish. At Kidmans Partners we can guide you through the process so you could protect your assets, distribute your estate, and meet your objectives.
To learn more about our estate planning service, get in touch with us through +61 3 9836 2900 or our contact form.