If you have ownership in a successful business, you and your estate planner need to develop a business survival plan. Even if you are gone, your business can survive and continue to generate income for your family. Or your ownership in the businesses can be turned into liquid cash and given as a payout to your family. You business will need, at the least, a person to manage the business until a new leader is selected or the business shuts its doors. Either way, your spouse is probably not the best person to lead your business into its next (or last) phase.
Businesses frequently buy life insurance policies on its key figures. And your estate planner can work with you and a life insurance agent to help you determine which kind of life policy is best for you and your business.
For example, if you have a business partner, you might want a life insurance policy that will allow your partner to buy your half of the business. Without a large cash sum to do so, your business partner will suddenly be in business with one or more of your beneficiaries — like your children or your spouse. In addition to a buyout policy, you might consider having a key person policy. With a key person policy, the business receives a cash sum to pay for the search for a new leader.Read More