You've poured your heart, soul, and countless hours into building your business. But have you given the same attention to protecting what you've built?
Many business owners make the critical mistake of neglecting their estate planning, leaving their hard-earned legacy vulnerable to legal complications, family disputes, and even business dissolution.
As you can tell, the consequences of inadequate estate planning can be severe. Substantial portions of an estate's value can be lost to taxes and legal fees when proper planning isn't in place. Perhaps most critically, the vision and values that drove an entrepreneur to success may be lost without clear guidance for successors.
But according to David Kaplan, Co-founder of the online estate planning platform Willed, it doesn't have to be this way: “With thoughtful estate planning, you can ensure your business thrives long after you're gone such that your family is provided for and your legacy remains intact.”
We asked Kaplan for his insights and practical tips to help fellow entrepreneurs navigate the complex world of estate planning. Simply put, it doesn’t matter if you're just starting out or you're a battle-hardened business owner. Now is the time to do something about your legacy.
1. Start early
"One of the most commonly held misconceptions about estate planning is that it's only for the elderly or the ultra-wealthy," says Kaplan
In reality, entrepreneurs should view estate planning as a fundamental aspect of their business strategy from the outset.
Start as you mean to go on by setting in place your plans for business continuity. It’ll not only bring peace of mind to you, but to those around you in your family and in the business as it hopefully grows.
2. Review regularly
Life moves fast, especially for entrepreneurs. And not just inside the business. Your situation can change personally too, which can affect your estate and its ownership.
According to Kaplan, "it’s a good idea to regularly review and update your Will every few years or after any significant life or business event."
Take a proactive approach if you want to ensure your estate plan actually reflects your current wishes and circumstances.
3. It needs to be robust
If you have built a large business, it’s not just you depending on it. Your planning — or lack thereof — could have a lasting impact on the lives of everyone in the business and their family.
Spend time to lay out in detail not just your choice of who should take over, but how they should manage and grow the business.
“Think of your Will as your final business strategy — one that preserves your vision and protects your legacy", says Kaplan.
4. Don't overlook digital assets
Just because it’s a digital asset does not mean it has no inherent value. From cryptocurrency holdings to valuable domain names and social media accounts, these assets can be significant and should be explicitly addressed in your Will.
“Your Will should clearly outline how you want your executor to handle and distribute your assets”, said Kaplan in an article on Willed about handling digital assets after death. “Then, make sure to inform a trusted family member or the executor of your Will where you've kept the details of your cryptocurrency accounts, including the private keys.”
5. Consider your philanthropic impact
Estate planning isn't just about distributing assets; it's an opportunity to make a lasting impact.
If you want to join the trend for entrepreneurs to incorporate charitable bequests into their Wills, think about the causes you are most aligned with and how you’d like to support them.
What’s next? Take action.
It’s not only your own future you’re securing with estate planning. You’re securing the longevity of your business and your family’s future.
As the saying goes, failing to plan is planning to fail.
