For Ohio small business owners, making a will and drawing up an estate plan can be especially important. The issue has been drawn into sharp relief by the death of several legendary musicians with substantial and valuable music catalogs, all of whom died without a will. Aretha Franklin and Prince died without estate plans in place, despite having estates worth approximately $300 million and $80 million, respectively. Other music icons like Tupac Shakur, Bob Marley, Kurt Cobain and Jimi Hendrix also died without a will. The consequences can be significant, especially if an estate is large, is complex or includes a privately owned business.
When a person dies without a will, his or her estate is distributed according to state law. There are some outlier cases that emphasize how important estate planning is: for example, people who have separated but not formally divorced from a spouse. Under state law and without any documents to the contrary, that legal spouse will inherit all or at least half of the estate. However, it can be important even when people have positive relationships with their spouses and children.
In order to thrive, a business needs dedicated ownership. Estate planning for a small business owner should include a will and a succession plan for the future of the business. In addition, if there are business partners, a buy-sell agreement should make clear how the other partners can keep control of the corporation. Other important factors can include disability insurance and life insurance, which can provide critical funds to help the business get through the transitional period.
Small business owners have a lot to think about when it comes to the future of their enterprises. By working with an estate planning lawyer, they may develop comprehensive plans and critical documents including wills, trusts, healthcare directives and powers of attorney.