As an entrepreneur ready to launch a business, you are careful with preparation and details. You create a business plan, seek an ideal office location, recruit investors and prepare to hire employees. You set the table for what you hope will be a successful business. But do not overlook this one thing: updating your will.
What? Really? Yes, updating your will is something that all business owners should consider when they start a company. The general rule is that people should revise their estate plans upon the emergence of a life event. Starting a business is, of course, among those life events.
A marriage, remarriage and death of beneficiary
An outdated will likely causes difficulties for your beneficiaries. If you divorced and remarried without updating your will, your former spouse likely will gain a chunk of your estate and your current spouse may be left with little. And what will happen to your business if you die?
You must think about these things. Typically, you should review your will every three to five years. Here are some of the reasons you should update your will:
- Launching a business: You need to clearly describe what will happen to your business. A succession plan may address some of these issues.
- Marriage: If this is your second marriage, an updated will provides for the children of your first marriage. This may help resolve any disputes.
- The birth or adoption of children and the birth of grandchildren: You want to make sure to take care of your financial heirs.
- The purchase of a home: A major property acquisition requires updates in your will.
- Divorce: In these scenarios, you may not want your former spouse to inherit any of your assets.
- The death of a spouse: Not only must a surviving spouse deal with grief, but he or she also must make changes to an estate plan.
- Receiving a significant inheritance: Such good fortune must be addressed.
- Changing guardians and executors: Maybe you had a falling out with your original choices or your values no longer jibed with theirs.
It is not just business owners who need to periodically review and update their estate plans. Any individual who has a will should subscribe to this same philosophy. Your beneficiaries will appreciate it.