New York business owners should consider an estate plan to protect their family and business in case they become incapacitated or pass away. One survey of over 500 entrepreneurs nationwide found that almost two-thirds of entrepreneurs had no estate planning documentation. More than three-fourths did not have a financial power of attorney, and only one-fourth had a will. Even fewer entrepreneurs reported having a living trust.
A financial power of attorney is important because it appoints someone to handle financial matters if a person becomes incapacitated. This agent can handle stock transactions, litigation, tax issues, business operations and other matters.
A will contains instructions for distributing property. It also names an executor to handle the estate. It is important to choose this person carefully. With a will, property goes through probate. This can take time. Property that is placed in a living trust does not go through the probate process. Instead, it will be managed by a trustee.
Even people who are not entrepreneurs need an estate plan. A person's needs will differ based on the size of the estate, the family and other individual circumstances, but an attorney may be helpful for both simple and complex estate plans. One advantage of working with an attorney is that it lessens the chance that the estate plan will be misunderstood or invalidated because of errors in legal language or other paperwork. It is also important to complete every step of an estate plan. For example, one error people make is creating a trust but failing to fund it. Reviewing the estate plan regularly is another important step. Over time, a person's needs and the needs of the estate, the person's family and the person's assets may change. For example, people might change who they want named on a health care proxy to make medical decisions.