While it is not fun to think about what should happen after you die, it is necessary for people of all ages to discuss. This is especially true if you own a small business and hope to see that business continue and thrive after your death.
Here are some ways to keep a small business afloat after you pass.
1. Gift your business to a successor
The main benefit of gifting your small business is that you should be able to put the company in new hands without having to pay a tax penalty, as long as the company is worth under a certain amount. This might be ideal for businesses that do not make a lot of money. Keep in mind that gifting has to occur when you are still alive.
2. Create a partnership
If you are a sole proprietor, finding someone to go into business with together is a good way to ensure that the legacy of your business carries into the future after you pass. A disadvantage of going this route is that you and your partner could have a clash of opinions while you are still alive, so go forward with caution. Choose a partner who you trust and get along with well.
3. Draft a living will
With a living will, you can appoint someone to take over the business after you die. While this can be costly, it helps keep the financials of your business private.
Knowing what will happen to your small business after you pass can give you greater peace of mind while still living.
