Estate Planning for Business Owners: Don’t Leave a Mess Behind

If you own a business — whether it’s a solo operation, a family-run shop, or a company with employees and partners — your estate plan must include a strategy for what happens to the business when you’re no longer around. And I’ll be honest, most business owners don’t think this through until it’s too late.

I've seen what happens when someone passes away or becomes incapacitated and there's no clear plan for the business. It leads to confusion, conflict, and sometimes the complete collapse of something they spent their life building.

Let me walk you through a few key points every Florida business owner should consider:

1. Assign Your Business Interest to a Trust

If you have a revocable living trust (and you should), your ownership interest in the business needs to be assigned to it. Why? Because if it’s not, your business may have to go through probate — and that can cause major delays, lost income, and disputes among heirs or partners. I often ask clients: “If something happened to you tonight, who could legally make decisions for your business tomorrow?” If you don’t know the answer, that’s a big red flag.

2. Have a Successor or Backup in Place

If you're a sole proprietor, you may want to name a successor in your plan — someone who can continue operations or wind things down properly. If you own the business with others, you need a solid buy-sell agreement or operating agreement that spells out what happens if an owner dies or becomes incapacitated. These agreements can prevent your heirs from becoming accidental business partners with your current partners — a scenario that rarely ends well.

3. Plan for Incapacity, Not Just Death

Death isn’t the only risk. What if you're hospitalized or mentally unable to run the business? A durable power of attorney and healthcare surrogate are essential, but for business owners, you might also consider appointing a “business manager” in your trust or creating a separate business continuity plan.

4. Think About Taxes and Liquidity

If your business has substantial value, your family may face estate tax or liquidity issues. For example, they might inherit a valuable business but have no cash to pay taxes or expenses. Life insurance, business succession planning, or installment sales can help ease that burden.

5. Train Your Team — and Your Family

A plan on paper is great, but it needs to be actionable. That means your spouse, successor, or key employees need to know what to do. Where are the passwords? Who’s the CPA? Where’s the lease? Take the time to document your processes — it’s a gift to those who will carry the torch when you can’t.

If you’ve spent years — maybe decades — building your business, don’t leave its future to chance. Let’s make sure your hard work continues to benefit the people you love, in the way you want.

If you'd like to explore a business-focused estate plan tailored to your unique goals, please reach out to me directly at (813) 244-7758 or Ross@RossSpanoLaw.com.

Cheers,

Ross Spano