It is essential for business owners to create an estate plan. We have discussed this many times in past blog posts, but it bears repeating. Business owners create plans and strategies for the future constantly, yet many still postpone estate planning, even if they understand how important it is.
So, why do business owners avoid estate planning?
1. They do not want to think about what could happen when they are gone
In general, business owners likely avoid estate planning for the same reasons most other people do. Thinking about the future – and the end of one’s life – can be overwhelming and even frightening.
It can also be particularly stressful for business owners to:
- Choose a successor for their business;
- Bring up this topic with business partners;
- Plan to avoid potential disputes between partners or shareholders.
2. Many business owners believe they do not have time
This is one of the most common excuses that nearly everyone uses and not just business owners. There is no doubt that running a business takes up a lot of time. And estate planning can be time-consuming as well, as business owners must:
- Take an inventory of their business and personal assets;
- Carefully establish different documents, including trusts, a succession plan and power of attorney; and
- Ensuring the estate plan is valid and complies with California law.
However, this excuse is often just that – an excuse. Business owners should make time to get their affairs in order for the future. It is often even possible to create an estate plan in different steps over a short period to make it better fit a business owner’s often busy schedule.
3. They might feel they have a lack of control
In the business world, it is essential to prepare for and control variables and risks as much as possible.
Thinking about the future and the unknown can make business owners feel like they have no control over what will happen to their business. On the contrary, creating a detailed estate plan that meets a business’ future needs helps business owners control the future of their business, as well as what happens to their assets.
Planning for the future can be overwhelming, but creating an estate plan sooner rather than later can help business owners minimize risks and protect their business in the long run.
