When most Arkansans think of estate planning, the only objective they have in mind is to transfer assets and belongings to the people and organizations they want to have them after they die. They also consider the possible delay (probate) and costs (fees and taxes) and want to decrease both of those. That is a correct purpose. But great estate planning goes beyond this—it creates a plan for someone to take your place (a successor) when you are no longer able to perform your responsibilities due to death or incapacity.
Consider all the areas in your life that would be affected by your death or incapacity. Here are some areas you may or may not have considered:
Your business. If you own a business, it most likely provides for your family, your employees, and your clients. Business succession planning is critical for the business to continue in your absence. You may want the business to be run by one of your children, a business partner, or a key employee. But without a written plan, the funding to make it happen and careful grooming of the right successor, the business you spent most of your life building and running will likely disintegrate without you. Life insurance is often used to provide the funding needed or to compensate other children who do not work in the business.
Your family. If you provide financial assistance or hands-on care for an aging parent, your spouse, or a child with special needs, you need to plan for a successor. Life insurance may provide the needed funds, but someone will need to manage the money, write checks and make financial decisions. You also need a plan for this person’s care if they outlive you. Will another family member take over? Will the loved one need to move to a care facility? The more you can do now, the smoother the transition in your absence. Family business law is the combination of these two areas of law.
Your minor children. If you have young children, you need to name a guardian. If you don’t do this and something happens to both parents, a judge will choose someone to raise them without knowing your preference. Do you have enough assets to provide for your family if something happens to you? Would your spouse be able to make it without your income? What about college for your children?
Your pets. For some people, their pets are their children. Most pet owners would agree their pets are part of the family. Who will succeed you as their owners if they outlive you? Have you planned for their financial care? Pet trusts are a vehicle that allow you to do this.
Your place as patriarch or matriarch. Who will succeed you as the head of your family? Have you considered which of your children or grandchildren would continue the values and lessons you want to pass down to future generations as part of your legacy? Are you grooming anyone as your successor?
Most of us want to leave some kind of legacy. Planning for successors in all areas of our lives provides an excellent example to others and shows how much we care