Hey, business owners! How’s your estate planning coming along? If you’re like most of us, you may agree with Woody Allen, when he once said“I don’t want to achieve immortality through my work; I want to achieve immortality through not dying.”

That’s a great plan if you can pull it off. But you may want to go ahead and put some actual estate plans in place too … just in case. In my last “No Dumb Questions,” I talked about the basics on that. As a business owner, you’ve got some “bonus” planning to do too, so you can harmonize your professional interests with your personal wealth, leaving a lasting legacy at home and at work.

As I covered last time, almost everyone’s personal estate starts with three simple sets of documents: (1) your will – to settle your estate after you pass away; (2) your living will or mandate, mostly to address end-of-life preferences; and (3) appropriate powers of attorney to cover any administrative support you may need during your lifetime.

Separating Your Business and Personal Possessions

For your business, a couple more essential documents can ensure those affairs are also settled the way you would prefer, rather than according to default directives that would essentially lump your business assets in with any other assets you own.

For starters, you’ve probably got very different ideas about how you’d like to pass the wand on your business’s operations and worth, compared to individual assets like your bank accounts, personal effects and family treasures.

The Vital Role of a Buy-Sell Agreement

Your buy-sell agreement is your first important estate planning tool as a business owner. Whether you’re a sole proprietor, a family business or in a partnership of unrelated individuals, this key component can allow for business stakeholders to retain or assume control of the business itself, while also letting you pass on the value of your own stake to your personal beneficiaries.

For example, without a buy-sell agreement in place to state otherwise, your business shares might automatically pass to your spouse. He or she would then need to decide whether to keep them or sell them. If they sell, it could be to anyone they please.

In many scenarios, this could turn into the opening shot at O.K. Corral. If there are other partners, they could end up with your spouse as a partner, or some other new partner they had little or no say in. Or, remember, the same could happen to you if one of your partners predeceases you and arrangements have not been made.

If some, but not all of your children are involved in the business, imagine the family feud that could ensue. Even if you and your spouse are co-owners or you are a sole proprietor, using a buy-sell agreement to preplan your business succession plans can make for far less stressful outcomes for all concerned.

For example, a buy-sell agreement can allow for partners to buy one another out, instead of having each partner’s shares pass to their spouse. This can ensure your spouse receives the worth of your shares, while your partners continue on with the business. Or maybe a key employee has the opportunity to buy an ownership interest. Or one of your family members is specifically designated to step into the role.

And, by the way, as I touched on in my recent “No Dumb Question” about life insurance, a cost-effective permanent insurance policy can be combined with your buy-sell agreement, so both the method and the means are available to implement and fund your intent.

Extra Powers of Attorney

Thoughtful powers of attorney – or POAs – are another important part of a business owner’s best-laid estate plans. Beyond the POAs I covered last time for covering your personal interests and effects, you can establish POAs for your business interests. Individuals granted POAs for your business activities may well differ from those authorized to administer your personal affairs.

As you can imagine, there’s a lot I haven’t covered here today. When setting up your business-related succession plans, I suggest working with experienced legal counsel – someone who’s “been there, done that,” and knows how to make sure all the critical details are present and accounted for.

One more important detail not to be missed? That would be signing up to receive future “No Dumb Questions” or connecting with me on LinkedIn, where I will continue answering these and other questions about your financial well-being.