Louisiana fans of Aretha Franklin or Prince won't want to follow in their footsteps when it comes to estate planning. Neither had a will despite being worth $80 million and $300 million respectively when they died. Dying without a will means that the government plays a significant role in determining how assets are distributed.
In addition to a will, small business owners should consider creating a succession plan. The plan will decide who gets the company after the current owner dies and how the transfer will take place. A health care directive and financial power of attorney documents should also be included in an estate plan. These documents give a person greater control over the treatment that he or she receives or how money is spent while incapacitated. This is true whether a person is incapacitated on a temporary or a permanent basis.
Once a plan has been created, its terms should be communicated to others in the family. This is important because it allows family members to know how to access documents that are secured by passwords or other means. In some cases, simply knowing where documents are makes it easier to settle an estate after a person passes on. Tools such as Future File can be used to organize passwords or documents themselves.
Taking time to prepare estate planning documents may make it easier for family members to settle a loved one's affairs. It may also prevent a legal challenge from delaying or preventing the transfer of assets such as a business.