Review your legal structure for liability protection and tax benefits.
Mitigate risks by assessing balance sheets and insurance coverage needs.
Implement a formal succession plan to ensure your business legacy survives exit or retirement.
Estate Planning
Small Business Owners: Protect Your Wealth & Grow Your Legacy
Small Business Owners: Protect Your Wealth & Grow Your Legacy
Small Business Owners: Protect Your Wealth & Grow Your Legacy
Zoe Team and Alec Montoya, CFP® (Zoe Network Advisor)
6 min read
Frequently Asked Questions
Frequently Asked Questions
Why does business structure matter?
Your chosen legal structure impacts your personal liability and tax obligations. Changing your structure can help protect personal assets.
How can I manage business risk?
Review your balance sheet for assets and consult an insurance agent to ensure you have proper liability and specialized industry coverage.
What is a succession plan?
A roadmap for death, incapacity, or retirement, ensuring your business operations continue smoothly and your legacy is passed on effectively.
Set your small business up for a successful future. Evaluate and review various questions that help you establish good routes and make you aware of key aspects for growth.
As a business owner, it is important to periodically review your: legal structure, insurance coverage, tax situation, benefit offerings, and succession plan. This blog will review 5 questions to ask yourself and remain aware of critical areas of financial planning for your business.
1. What legal structure should my small business have?
Whether your business is a side hustle or your full-time occupation, it is important to consider your legal structure. The structure of your business can impact taxation and personal liability.
Several common forms of ownership include Sole Proprietorship, Limited Liability Company (LLC), S Corporation, C Corporation, and Partnerships. The Sole Proprietorship is the easiest form of business ownership, but it can also expose you to personal liability. Other ownership forms require legal work but can offer personal liability protection and tax planning opportunities.
If you are sole proprietor, you may want to consider evolving the structure of your business to a form of ownership that protects your personal assets or one that offers potential tax benefits.
2. How can I manage risk for my small business?
Your business may own valuable assets that you want to insure like real estate, equipment, and automobiles. It’s also important to review liability coverage, overhead insurance, and specialized lines of insurance related to your industry.
I would start the insurance review process by reviewing the business balance sheet. Your business balance sheet will identify assets to protect. I would then have a conversation with the agent about your work and how the business interacts with stakeholders. This conversation can aid the agent in better understanding where risk may arise during operations. A collaborative conversation with you, your financial advisor, and your insurance agent can be especially effective in finding the right mix of insurance coverage.
3. How do I avoid overpaying in taxes as a small business owner?
Proactive tax planning is a must. It is easy to be caught off guard during tax season by an underpayment.
Tax planning involves forecasting your business revenue, expenses, and profitability. A profit and loss statement is a good place to start this analysis. Your accountant and financial advisor can use tax planning software to forecast how taxes impact your business and personal financial plan. Proactive tax planning can help you budget for taxes, find additional deductions, and create better awareness of business fundamentals.
4. What employee benefits should small businesses offer?
Employee benefits can be a valuable form of compensation and offer tax benefits. Educating your staff about their benefit package can excite them and promote higher retention.
Several key benefits include:
Insurance Offerings: As a small business owner you and your employees may need health insurance, life insurance, or disability insurance. These benefits are often expected by employees and are a good way to differentiate yourself from other employers.
Retirement Plans: There are various retirement plans you can choose from. A good advisor will educate you about the best option and help your team understand their retirement plan. Several retirement plans structures that I see in practice have been described below:
SIMPLE IRA: The SIMPLE IRA allows an employee deferral up to $14,000 in 2022. Those age 50 or older can save an additional $3,000. Employers can either match employee contributions up to 3% of salary or make a 2% non-elective contribution. All savings to a SIMPLE IRA plan are tax deferred.
SEP IRA: The SEP IRA is a tax-deferred account that offers a maximum contribution up to 25% of your income or net earnings from self-employment but limited to a maximum of $61,000 for 2022. This plan may not be ideal if you have employees because you must fund each employee’s account with the same percentage contribution as your own.
401(k) and Profit-Sharing Plan: This account structure can offer flexibility for both the business owner and employees. Employees can save their elective deferrals into either a pre-tax 401(k) or a Roth 401(k). For 2022 the IRS elective deferral limit is $20,500 or $27,000 for those aged 50 or older. In addition to deferrals, employers can offer a match and make profit-sharing contributions. The IRS limits plan contributions to a maximum of $61,000 per year. The profit-sharing feature may allow business owners to strategically fund their retirement accounts up to the $61,000 limit.
Cash Balance Plan: This is a complicated retirement plan structure that is beyond the scope of what most businesses need. However, I do encounter some owners that would like to shelter large sums of money in a tax-advantaged way. This plan can allow a business owner to shelter hundreds of thousands of dollars. The viability of this plan needs to be determined on a one-on-one basis. Factors such as the number of staff, their ages, and their incomes all play into the funding calculation.
Other Benefits: Accounts like Health Savings Accounts and Dependent Care Flexible Spending Accounts may also be benefits worth considering. These accounts can offer you and your team tax savings today and help budget for two critical areas of life – health and childcare.
5. Do I have a succession plan?
Your business is likely connected to your personal identity and financial success. It is important for your business to have a succession plan for death, incapacity, and retirement. Your succession plan should empower and position the new owner to continue the legacy you have built.
A buy-sell agreement can be an effective way to prepare for an unexpected event like death or disability. This agreement can ensure payment to you or your beneficiaries and allow operations to continue.
As you approach retirement you should consider your exit plan. You should review tax ramifications of selling your business as there may be ways to structure the deal in advance to reduce taxes. You should familiarize yourself with how other companies in your industry are valued and the marketability of your business. You may want to enlist the help of a broker that can help you navigate finding a buyer. You should give yourself plenty of time to find the right successor.
Bottom Line
I will close with one final question: Do you have the time or interest to review, implement, and monitor the key financial topics reviewed in this article? Delegating can empower you to focus on your highest calling. A financial advisor, supported by a team of tax and insurance professionals, can structure a financial plan for your immediate and future needs. To top it off, the fees for our service may even be tax deductible as a business expense.
Set your small business up for a successful future. Evaluate and review various questions that help you establish good routes and make you aware of key aspects for growth.
As a business owner, it is important to periodically review your: legal structure, insurance coverage, tax situation, benefit offerings, and succession plan. This blog will review 5 questions to ask yourself and remain aware of critical areas of financial planning for your business.
1. What legal structure should my small business have?
Whether your business is a side hustle or your full-time occupation, it is important to consider your legal structure. The structure of your business can impact taxation and personal liability.
Several common forms of ownership include Sole Proprietorship, Limited Liability Company (LLC), S Corporation, C Corporation, and Partnerships. The Sole Proprietorship is the easiest form of business ownership, but it can also expose you to personal liability. Other ownership forms require legal work but can offer personal liability protection and tax planning opportunities.
If you are sole proprietor, you may want to consider evolving the structure of your business to a form of ownership that protects your personal assets or one that offers potential tax benefits.
2. How can I manage risk for my small business?
Your business may own valuable assets that you want to insure like real estate, equipment, and automobiles. It’s also important to review liability coverage, overhead insurance, and specialized lines of insurance related to your industry.
I would start the insurance review process by reviewing the business balance sheet. Your business balance sheet will identify assets to protect. I would then have a conversation with the agent about your work and how the business interacts with stakeholders. This conversation can aid the agent in better understanding where risk may arise during operations. A collaborative conversation with you, your financial advisor, and your insurance agent can be especially effective in finding the right mix of insurance coverage.
3. How do I avoid overpaying in taxes as a small business owner?
Proactive tax planning is a must. It is easy to be caught off guard during tax season by an underpayment.
Tax planning involves forecasting your business revenue, expenses, and profitability. A profit and loss statement is a good place to start this analysis. Your accountant and financial advisor can use tax planning software to forecast how taxes impact your business and personal financial plan. Proactive tax planning can help you budget for taxes, find additional deductions, and create better awareness of business fundamentals.
4. What employee benefits should small businesses offer?
Employee benefits can be a valuable form of compensation and offer tax benefits. Educating your staff about their benefit package can excite them and promote higher retention.
Several key benefits include:
Insurance Offerings: As a small business owner you and your employees may need health insurance, life insurance, or disability insurance. These benefits are often expected by employees and are a good way to differentiate yourself from other employers.
Retirement Plans: There are various retirement plans you can choose from. A good advisor will educate you about the best option and help your team understand their retirement plan. Several retirement plans structures that I see in practice have been described below:
SIMPLE IRA: The SIMPLE IRA allows an employee deferral up to $14,000 in 2022. Those age 50 or older can save an additional $3,000. Employers can either match employee contributions up to 3% of salary or make a 2% non-elective contribution. All savings to a SIMPLE IRA plan are tax deferred.
SEP IRA: The SEP IRA is a tax-deferred account that offers a maximum contribution up to 25% of your income or net earnings from self-employment but limited to a maximum of $61,000 for 2022. This plan may not be ideal if you have employees because you must fund each employee’s account with the same percentage contribution as your own.
401(k) and Profit-Sharing Plan: This account structure can offer flexibility for both the business owner and employees. Employees can save their elective deferrals into either a pre-tax 401(k) or a Roth 401(k). For 2022 the IRS elective deferral limit is $20,500 or $27,000 for those aged 50 or older. In addition to deferrals, employers can offer a match and make profit-sharing contributions. The IRS limits plan contributions to a maximum of $61,000 per year. The profit-sharing feature may allow business owners to strategically fund their retirement accounts up to the $61,000 limit.
Cash Balance Plan: This is a complicated retirement plan structure that is beyond the scope of what most businesses need. However, I do encounter some owners that would like to shelter large sums of money in a tax-advantaged way. This plan can allow a business owner to shelter hundreds of thousands of dollars. The viability of this plan needs to be determined on a one-on-one basis. Factors such as the number of staff, their ages, and their incomes all play into the funding calculation.
Other Benefits: Accounts like Health Savings Accounts and Dependent Care Flexible Spending Accounts may also be benefits worth considering. These accounts can offer you and your team tax savings today and help budget for two critical areas of life – health and childcare.
5. Do I have a succession plan?
Your business is likely connected to your personal identity and financial success. It is important for your business to have a succession plan for death, incapacity, and retirement. Your succession plan should empower and position the new owner to continue the legacy you have built.
A buy-sell agreement can be an effective way to prepare for an unexpected event like death or disability. This agreement can ensure payment to you or your beneficiaries and allow operations to continue.
As you approach retirement you should consider your exit plan. You should review tax ramifications of selling your business as there may be ways to structure the deal in advance to reduce taxes. You should familiarize yourself with how other companies in your industry are valued and the marketability of your business. You may want to enlist the help of a broker that can help you navigate finding a buyer. You should give yourself plenty of time to find the right successor.
Bottom Line
I will close with one final question: Do you have the time or interest to review, implement, and monitor the key financial topics reviewed in this article? Delegating can empower you to focus on your highest calling. A financial advisor, supported by a team of tax and insurance professionals, can structure a financial plan for your immediate and future needs. To top it off, the fees for our service may even be tax deductible as a business expense.
Disclosures: Zoe Financial, Inc. ("Zoe Financial") is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Zoe Financial provides investment advisory services and access to independent registered investment advisers through its platform. The information provided by Zoe Financial is for educational and informational purposes only and should not be construed as personalized investment advice or as an offer to buy or sell any security. All investments involve risk, including possible loss of principal. Past performance is not indicative of future results. Clients should consult with their own financial, tax, or legal professionals before making any investment decisions. The material presented by Zoe Financial is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Material presented has been gathered from sources believed to be reliable, however Adviser cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Past performance is no guarantee of future results. Zoe Financial does not provide legal or tax advice, and nothing contained in these materials should be taken as legal or tax advice. SEC Registration does not constitute an endorsement of Zoe Financial by the SEC nor does it indicate that Zoe Financial has attained a particular level of skill or ability. The sole purpose of this material is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned may not be appropriate for all clients. Before making any investment, each investor should carefully consider the risks associated with the investment, as discussed in the applicable offering memorandum, and make a determination based upon their own particular circumstances, that the investment is consistent with their investment objectives and risk tolerance. Lower expenses do not guarantee better investment performance. Certain information contained herein may constitute forward-looking statements. Due to various risks and uncertainties, actual events, results or the performance of a fund may differ materially from those reflected or contemplated in such forward-looking statements.
Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.
Investment advisory services are provided by Zoe Financial, Inc. (Zoe Financial), an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Learn more about Zoe Financial on the SEC’s Investment Adviser Public Disclosure website. Brokerage services are provided by Zoe Securities LLC and Apex Clearing Corporation, members of the Financial Industry Regulatory Authority Inc. (FINRA) and Securities Investor Protection Corporation (SIPC). Learn more about Zoe Securities and Apex on FINRA’s BrokerCheck website.
The information in the visuals above is for illustrative purposes only and does not represent an actual user's account, balance, or return. Zoe Financial does not provide tax or legal advice.
Explore the Zoe Wealth Platform with AI
Some of this content may have been generated with the assistance of AI. Please review and sense-check all outputs, as AI tools can occasionally produce incomplete or inaccurate information.
In certain situations, you may be required to disclose that the content was “generated by AI.” Please confirm any specific disclosure or labelling requirements with Compliance.
(646) 680-9244
support@zoefin.com
666 Third Ave, 6th Floor
New York, NY, 10017
Copyright © 2026 Zoe Financial, Inc. | All rights reserved
Find an Advisor
Retirement Planning
Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.
Investment advisory services are provided by Zoe Financial, Inc. (Zoe Financial), an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Learn more about Zoe Financial on the SEC’s Investment Adviser Public Disclosure website. Brokerage services are provided by Zoe Securities LLC and Apex Clearing Corporation, members of the Financial Industry Regulatory Authority Inc. (FINRA) and Securities Investor Protection Corporation (SIPC). Learn more about Zoe Securities and Apex on FINRA’s BrokerCheck website.
The information in the visuals above is for illustrative purposes only and does not represent an actual user's account, balance, or return. Zoe Financial does not provide tax or legal advice.
Explore the Zoe Wealth Platform with AI
Some of this content may have been generated with the assistance of AI. Please review and sense-check all outputs, as AI tools can occasionally produce incomplete or inaccurate information.
In certain situations, you may be required to disclose that the content was “generated by AI.” Please confirm any specific disclosure or labelling requirements with Compliance.
(646) 680-9244
support@zoefin.com
666 Third Ave, 6th Floor
New York, NY, 10017
Copyright © 2026 Zoe Financial, Inc. | All rights reserved
Find an Advisor
Retirement Planning
Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.
Investment advisory services are provided by Zoe Financial, Inc. (Zoe Financial), an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Learn more about Zoe Financial on the SEC’s Investment Adviser Public Disclosure website. Brokerage services are provided by Zoe Securities LLC and Apex Clearing Corporation, members of the Financial Industry Regulatory Authority Inc. (FINRA) and Securities Investor Protection Corporation (SIPC). Learn more about Zoe Securities and Apex on FINRA’s BrokerCheck website.
The information in the visuals above is for illustrative purposes only and does not represent an actual user's account, balance, or return. Zoe Financial does not provide tax or legal advice.
Explore the Zoe Wealth Platform with AI
Some of this content may have been generated with the assistance of AI. Please review and sense-check all outputs, as AI tools can occasionally produce incomplete or inaccurate information.
In certain situations, you may be required to disclose that the content was “generated by AI.” Please confirm any specific disclosure or labelling requirements with Compliance.
(646) 680-9244
support@zoefin.com
666 Third Ave, 6th Floor
New York, NY, 10017
Copyright © 2025 Zoe Financial, Inc. | All rights reserved