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Family Matters: Planning Mistakes Small Business Owners Should Avoid

Updated: Jul 14

Small business owners are nothing if not hard workers. Many spend a lifetime pouring their blood, sweat, and tears into their businesses. Without smart planning, all that work can be lost through disability, retirement, or death. If you own your own business and want to set your family up for a bright future, avoid these common planning mistakes:

Skipping Disability Insurance

Pop quiz: How long would your personal savings provide for you and your family if you become disabled? For most Americans, the answer is not very long at all. Unfortunately, your personal expenses will not stop just because you are unable to work. Disability insurance policies help ensure that your family is taken care of financially while you are out of the workforce.

Mixing Business and Personal Finances

Many family-run businesses start small. When you are running your company out of your basement or garage, it can be easy to forget to separate your business and personal finances. You might not notice too much of an issue at first, but as you grow, the combination can become problematic. Nip this problem in the bud by setting up business accounts that keep your personal finances out of your company finances.

Failing to Have a Succession Plan

When you retire, do you know who will take over your business? Many small business owners forget to put a succession plan in place. Failing to plan in this way can seriously backfire for those in your family who may (or may not) have an interest in taking over the family business. Consider how the business will be run should you become sick or suddenly pass away. It can be uncomfortable to discuss with your families ahead of time, but figuring out a succession plan now will save you and your loved ones serious stress later.

Taking a DIY Approach to Estate Planning

There are tons of online resources for estate planning, all boasting their ease of use and affordability. While these tools can be helpful for some people, the average small business owner will have more complicated affairs to get in order. A meeting with an experienced estate planning attorney will help you understand your options and make important decisions about your assets. You do not want something you worked so hard for to be gone in an instant due to a small error in an online will or power of attorney.

If you are eager to set your family and business up for long-term success, schedule an appointment with one of our team members by calling us at (281) 885-8826 or by clicking here to schedule online.

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