Estate Planning 101: Personal and/or Business

Joe Simon
Jan 1
3 min read

An effective estate plan does far more than distribute assets. It helps minimize transfer costs, ensures liquidity at death, protects your family, and creates a roadmap for both personal wishes and business continuity. Whether for your household or your company, estate planning is about clarity, protection, and long-term strategy.

Last Will and Testament

Your will outlines who receives your individually owned assets and designates:

An executor to administer your estate
Guardians for minor children

A will does not typically govern jointly owned property or assets passed by beneficiary designation (life insurance, annuities, retirement accounts). Any assets directed by your will must pass through probate.

Living Will & Healthcare Proxy

A living will instructs doctors and family on the care you do—or do not—want if you become unable to make your own medical decisions.

A healthcare proxy (power of attorney for healthcare) authorizes someone you trust to make medical decisions on your behalf.

Both ensure your wishes are honored and reduce stress for loved ones.

Durable Power of Attorney

A durable power of attorney authorizes a trusted individual to act on your behalf for financial, legal, and administrative matters if you become incapacitated. This prevents the need for court-appointed guardianship and protects your privacy, assets, and decision-making.

Estate Planning for Family Business Owners

Only about one-third of family businesses have a formal succession plan. Coordinating personal estate planning with business planning is essential.

Plan for Your Successor

Ask yourself:

Who will run the business at retirement, disability, or death?
Does this person have the maturity, experience, and desire to lead?

Identifying and preparing a successor is central to long-term business stability.

Transfer of Ownership

Will ownership pass through gift or sale—or a combination? A buy-sell agreement is often used to determine the purchase price, method, and timing of future ownership transitions. Funding for buy-sell agreements can be structured in several ways to meet your goals.

Plan for Estate Taxes

Many estates lack sufficient liquidity to pay estate taxes without liquidating business assets. Planning early helps protect the enterprise and ensure continuity.

Provide for Key Employees

Non-qualified deferred compensation plans help retain essential talent who may exceed contribution limits in qualified retirement plans. Retaining key employees is often critical to the survival of a family business.

The Role of Life Insurance

Life insurance plays a vital role in estate and business planning by providing tax-free liquidity when it’s needed most.

Personal Uses

Provide income for surviving family members
Pay estate taxes
Pay mortgages and debts
Equalize inheritances among children
Leverage annual and lifetime gift/estate tax exemptions

Business Uses

Informal funding for deferred compensation
Key-employee benefits
Business continuity after the loss of a key employee
Funding buy-sell agreements
Protecting business value during transitions

Maintaining Your Estate Plan

Estate planning is not “create it once and forget it.” Review your plan regularly, especially after changes in:

Marital status
Births, deaths, special-needs situations, or family changes
Business structure or ownership
Tax laws
Residency (moving to another state)
Asset levels or types

Building Your Estate Planning Team

Professional coordination leads to stronger outcomes. Your team may include:

Attorney
Accountant
Financial professional
Life insurance specialist
Trust officer or corporate trustee

In Conclusion: Living Benefits of Life Insurance

Life insurance can provide valuable benefits during your lifetime, not just at death:

Access cash value to supplement income tax-free
Use accelerated benefits to pay for long-term care
Access lump-sum benefits in the event of critical illness (cancer, stroke, heart attack, etc.)