Health issues are another concern. Entrepreneurs are often unable to afford good health insurance or long-term care protection. Business assets are at risk if you become unable to work.
Business owners can also have a much larger estate tax burden. Minimizing these taxes requires thoughtful planning and expert guidance.
If you’re self-employed, make sure you keep the following in mind regarding your estate planning:
For the more conventionally employed, all that’s usually needed is someone you can trust.
Depending on your business and assets, it’s possible that your will could be considerably more complicated than that of others. Hire an attorney that works regularly with business owners.
A Simplified Employee Pension Individual Retirement Account (SEP–IRA) is more than a great retirement account option. It’s also a great tool for estate planning. It varies with each state, but most assets placed in these accounts are shielded from bankruptcy proceedings.
Transfer your assets to your beneficiaries before your death. There are all types of tax implications, but it can be a useful strategy. It’s also possible, and often preferable, to sell some of your business assets to your beneficiaries for a small amount of money.
Many are unaware that Medicare and Medicaid can take your assets if you’re placed in a long-term care environment. This type of care can be very expensive, and long-term care insurance is also pricey. Many entrepreneurs are unable to afford this type of insurance.
Consider joining the American Association of Retired Persons (AARP). It’s a powerful lobbying group that provides excellent retirement planning resources for a low annual membership fee.
Depending on the nature of your business and your assets, trusts can be an important estate-planning vehicle.
Life insurance is often used as an estate-planning tool by the wealthy, since it’s commonly exempt from taxes. For the self-employed, life insurance policies can also be useful.
Depending on the nature of the business, estate planning for the self-employed can be very similar to that of the more conventionally employed. It can also be much more involved.
Mr. Abraham is an experienced attorney and founding member of the Law Firm of Abraham & Bauer. The Towson, MD office of the firm concentrates its practice in Estate Planning, Elder Law, Probate, Medical Assistance (Medicaid), Guardianship, Asset Preservation and Fiduciary Representation.
He is an active member in a number of professional organizations that focus on law, the senior community, and estate planning. He works with clients in Central Maryland, especially in Towson, Hunt Valley, Lutherville/Timonium, Parkville, White Marsh, Bel Air & Northern Baltimore City.
Schedule a consultation to help you and your loved ones.