Colorado business owners should give some thought to how to incorporate their businesses into their estate plans. For instance, a business owner’s trust should include a succession plan detailing who will oversee the business if something were to happen to the trustor. If the business is co-owned, it could be a good idea for the owners to come up with a succession plan together, in the unlikely event that something were to happen to both of them. Options could include passing the business to a family member or other third party or having the business sold.
Estate planning includes more than after-life preparations. A succession plan should also state who will take over a business if the business owner becomes sick or incapacitated. Along those same lines, an estate plan can include a medical power of attorney, and this is something that even people with minimal assets should consider setting up. A medical power of attorney indicates who will make medical decisions on a person’s behalf if that person becomes incapacitated. Similarly, a financial power of attorney would give someone to make financial decisions on another person’s behalf.
People with families to provide for should consider getting life insurance and/or disability insurance to cover their family financially if they unexpectedly die or become unable to work. Business owners can also look into key person insurance, which would list the business as a beneficiary, and it could help cover business expenses for the person who has to take over the business.
An estate planning attorney could help people with or without a business decide what type of estate plan is best for them. For instance, some people benefit more from an irrevocable trust, which cannot be changed during a person’s lifetime, whereas others benefit from a revocable trust, which offers more flexibility.