Why Your Business Needs an Estate Plan, Too
What would happen to your business if you didn’t come back after a long weekend? Would your clients get what they’ve paid for? Would invoices get paid? Would anyone even know where to start?
This week’s Tuesday Triage question came from Julie in Virginia, who runs an online business and wanted to know if her business needs an estate plan. The answer is simple: yes.
Because planning isn’t just about what happens if something goes wrong; it’s about agency. It’s about building a business that can survive a sale, a sabbatical, or the unexpected.
Key Takeaways
Get your foundation in place: Start with your business basics: your EIN letter from the IRS, and, if you’re an LLC, your Articles of Organization and your Operating Agreement. Yes, even if you’re a solopreneur, you need an operating agreement. These documents don’t just prove your business exists, they outline what happens if you’re incapacitated or die, ensuring your business can carry on, or unwind, whichever is the goal.
Protect your financials: If you’re the only signer on your business accounts, it’s time to add someone you trust. Banks typically have a straightforward process to set up a second signer, and this step ensures paying expenses and payroll don’t grind to a halt if you’re suddenly unavailable. Think of it as a safeguard to keep your business moving smoothly in an emergency.
Document your systems: Too many small businesses rely on processes that live only in the business owner's head. Documenting your standard operating procedures, even simple step-by-step guides, such has “how to post a blog,” can make your business more resilient. Whether it’s publishing content, managing invoices, or onboarding clients, having your systems written down keeps things running and supports growth today.
Think about your people: Every business runs on relationships. Make sure you have an up-to-date, accessible list of your key clients, contractors, and team members, along with details on current projects and responsibilities. Adding a “death or incapacity” clause to client contracts can also prevent confusion, set expectations, and protect your reputation if something unexpected happens.
Manage your risks: Insurance is a critical part of your plan. At a minimum, make sure someone knows what policies you have, where they’re stored, and when they renew. For most small businesses, a general liability policy, cyber or digital media coverage, and professional liability insurance are must-haves. As your business grows, consider advanced strategies like using life insurance to maintain cash flow during a transition.
Whether you’re just getting started, scaling your business, or preparing to sell, having a plan in place will make your business stronger today AND easier for someone to manage tomorrow.
Listen to the full episode here:
