Personally, you must prepare for the day in which you are, unfortunately, no longer around. And if you are a business owner, your business must also be fully prepared when this day arrives. This should all be reflected in your estate plan. Continue reading to learn what needs to be covered in a business owner’s estate plan and how an experienced Putnam County estate planning attorney at The Law Office of Andres D. Gil, PLLC can walk you through this.
Why does a living trust need to be included in a business owner’s estate plan?
First of all, you may want to establish a living trust so that you, as the trustee, can hold onto ownership of your assets during your lifetime. But at the same time, you may distribute these assets to your appointed trustee upon your passing.
So, as a business owner, a living trust allows you to still have access to and manage your business shares. Then, the individual whom you wish to take over your business may receive these shares upon your passing or at another time specified in your terms and conditions.
With that being said, it is usually recommended to transfer your business shares through a living trust rather than through a will. This is because, with a living trust, the new business owner will not have to undergo the hassle of probate court and its associated fees.
What else needs to be covered in the estate plan?
In addition to a living trust, other facets of your estate plan can cover your wants and needs regarding your business. Examples are as follows:
- A buy-sell agreement: this agreement may allow your existing business partners to purchase your shares upon your passing. More specifically, you may disclose your preference for who can and cannot purchase your shares, along with your preferred sales price of your shares.
- A succession plan: this plan may allow your desired beneficiaries to inherit your business upon your passing. More specifically, you may disclose when and how your beneficiaries should assume control, along with a strategy on how to pass down confidential information and delegate responsibilities.
- A life insurance plan: this plan may allow your existing business partners to buy out your shares. More specifically, this is so long as you name these individuals are your desired beneficiaries. Or, this plan may allow you to provide your loved ones with enough liquidity to manage your affairs if your business does not have enough cash flow.
This is all to say that there may be extra steps that need to be taken in your estate plan if you are a business owner. So you must tackle your estate planning as soon as possible. Call a skilled Putnam County estate planning attorney at The Law Office of Andres D. Gil, PLLC today.