Estate planning can be beneficial to anyone who owns assets in Michigan, especially if those assets include a business. Many people are only familiar with wills, but estate planning can also include the creation of a trust fund or a succession plan as well as designating a power of attorney or taking out an insurance policy.
An important component of estate planning is identifying who will be in charge of a person’s financial or medical decisions if someone becomes incapacitated. A financial or medical power of attorney can be written to designate someone to make decisions on another person’s behalf if that person can no longer do so. A succession plan can do the same with respect to a business, and it can also designate a person to take over the business after the owner passes away.
A business owner who wants to pass on the business, rather than selling or closing it, should consider leaving money for the person who inherits it. Key person insurance is one type of insurance that can be used specifically for business expenses if the business itself is listed as a beneficiary. Whether or not a person owns a business, he or she should consider whether to take out a life or disability insurance policy to help his or her spouse and kids if something unexpected happens.
Within an estate plan, a person can have a will or a trust. A living revocable trust allows the person creating the trust to retain power over his or her assets while still alive, and it designates a trustee to oversee them when the person passes away. How a business is handled in the estate plan depends in part on how the business is set up and whether there are any co-owners. An estate planning attorney can help business owners and other individuals in drafting either a trust or a will.