Successful business owners in Kentucky will likely understand the importance of planning today for what could happen tomorrow. However, establishing personal estate plans before finalizing a business continuity plan is advisable. It could ensure the family is cared for in the event of a business owner’s death or incapacitation.
There are four important documents to prepare for personal estate planning, and keeping them up to date is essential.
Will and testament
A will allows a person to dictate how the estate’s assets must be distributed. This is also the document where a guardian can be listed for minor children.
The objective of a living trust is similar to that of a will. However, additional benefits include avoiding costly and time-consuming probate. Furthermore, the testator can include instructions for the event of his or her incapacitation due to illness or injury.
Power of attorney
Designating a power of attorney is done to appoint a person to deal with retirement accounts, real estate transactions, tax returns and other financial matters not part of a trust. That person’s authority could be effective immediately, or it could be triggered upon an event that causes incapacitation.
Health care directives
This document contains directives and instructions to deal with preferred medical choices and also end-of-life care.
Once personal estate plans are in place, a Kentucky business owner can start addressing plans for leadership change of the business. Some advisors say the way to go is to prepare a business for the worst-case scenario. These matters are typically handled with professional support and guidance.