The Law Offices of Kelly J. McDonald, PLLC - Probate, Elder Law, & Special Needs

Estate planning for entrepreneurs

Small business owners in Arizona should have an estate plan that will detail what should happen to their surviving loved ones, assets and business. This requires having more than just a will in place.

There are many factors for entrepreneurs to consider when planning for their estate. Disability insurance can be used to replace as much as 60 percent of their income, free of taxes, in the event of an injury or illness that prevents entrepreneurs from making their income.

Life insurance is also a necessity, as it can be used to ensure that surviving loved ones will be able to pay for housing, food, education, clothing and other expenses. It can also be used to ensure that there are funds available to apply to the business after the death of the owner so that the business can continue to operate.

There are a number of legal documents that should be drafted for an estate plan. Wills are the basic component of an estate plan and are particularly important for individuals who have minor children, as the documents can be used to specify a guardian. However, entrepreneurs may also want to consider including a trust as part of their estate plan, as trusts can be used to bypass the probate process, which is a lengthy, expensive and public process.

Another document entrepreneurs should have prepared is a health care directive. This document can be used to specify what type of treatment should be used if they become unable to decide on health care issues in the future.

An estate planning attorney may advise entrepreneurs about which type of legal documents should be included in an estate plan to protect their business if they become incapacitated or die. The attorney may recommend certain types of powers of attorney, wills and trusts.

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