Estate Planning, Citizens Bank, Citizens Bank of Tennessee,


You’ve worked hard to make your business a success. So, it’s important to ensure that your business can continue to run smoothly and deliver value to your family, team, and customers even if you’re no longer at the helm.

It’s a task that entrepreneurs often put off in favor of more pressing day-to-day demands, but it’s crucial to create an estate plan that takes your business assets into account. A sound plan will specify how assets will be distributed, who will take over leadership of the business, and – most importantly – how your loved ones will be supported.

Estate planning for small business owners usually requires thorough discussions with financial advisors, lawyers, accountants, colleagues, and family. But you can get started now by thinking over these five basic steps:

  1. Write Your Will

Make sure your last will and testament includes clear and complete instructions for the distribution of your business assets. Name someone you trust to be the executor of your will; they will be responsible for carrying out all your wishes. Also, determine who will receive your important documents and business information, such as login credentials for online accounts. Compile and store this information separately from your will so it’s not filed publicly in probate court.

  1. Draft a Power of Attorney

Designate a reliable person to serve as your agent (or “attorney-in-fact”) in the event that you become incapacitated due to an accident or illness. In such a circumstance, your agent would be tasked with carrying out your key business responsibilities, such as paying creditors, filing taxes, and handling payroll for your staff. Work with an experienced estate attorney to craft a legal power of attorney document that clearly lays out the agent’s obligations and rights.

  1. Form a Living Revocable Trust

A will is a public document that is probated in court. Distributing your business assets through probate court can be a slow and costly process, and it can also expose sensitive information to the public. A living revocable trust can be a more efficient and discreet alternative that helps your estate avoid probate and allows a smoother ownership transition for your business. This option lets you manage and update the assets within the trust for as long as you remain the trustee.

  1. Establish a Buy-Sell Agreement

If your business has multiple owners, having a buy-sell agreement in place can be helpful in determining how your ownership interest will be distributed in the event of your death. It’s also important in case you declare bankruptcy or go through a divorce. It’s common for business partners to purchase a life insurance policy for each owner, with the other owners listed as beneficiaries. The payout is then used to purchase the ownership interest of the deceased owner.

  1. Create a Succession Plan

One of the best ways to support your enterprise’s long-term success is to create a business succession plan that can ensure a seamless transition of leadership. Your plan should specify who will take ownership – whether a family member, business partner, or outside buyer – and establish a timeline for this transition. An independent valuation is often a critical component of this process; consult an accredited business appraiser to find out if you need one.

Thinking Ahead

At Citizens Bank, we’ve been supporting East Tennessee business owners for over 85 years. Our friendly and knowledgeable Raymond James Financial Advisors can help you develop a comprehensive strategy designed to reduce potential tax consequences, preserve your wealth, and protect your legacy. Learn more and get in touch today.

Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Investment Advisory services offered through Raymond James Financial Services Advisors, Inc. Citizens Investment Services and Citizens Bank are not registered broker/dealers and are independent of Raymond James Financial Services, Inc.

Any opinions are those of the author and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. Any information is not a complete summary or statement of all available data necessary for making a decision and does not constitute a recommendation.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.