Estate planning is often seen as something that individuals do to protect their families – perhaps they create a will to express their wishes after their death. They may include a trust or other forms of paperwork, like a power of attorney. But what about business owners? Should they create an estate plan that is specific to their business?
In many cases, the answer is a resounding “yes.” Estate planning is something that every business owner should look into, as a solid plan can do a lot to ensure continuity and profitability in the event that the owner dies or is incapacitated.
This is something that many business owners don’t think about, but it’s important. Take a moment to consider what your spouse or grown children may have to deal with in the event of your death: would they have to dig through your records to figure out the next steps to take? Would they know your wishes as to who would run the business – and would they be in a place where they could legally make those decisions?
If, as a business owner, you die without an estate plan that includes your business, it is very likely that your spouse or adult children would have to go through a lengthy, complicated, and expensive probate process in order to be able to run or sell your business. In the meantime, they could be left with trying to figure out how to salvage the company you built.
Estate Planning and Business Continuity
When it comes to keeping your business running and growing in the event of your death, an estate plan can solve a lot of problems.
Rather than having to go through the probate process, you can name your successor and detail out who will own and manage your business – and the transition can happen fairly seamlessly.
Do you want your family to be provided for, but know that your spouse is not the best person to take over the business? Have you been training specific people to take certain roles and want to make sure your plans are carried out? You can provide for these details in your succession plan.
Estate planning goes further than this, though. If your business were to go through probate, a lot of details could become public record that you may wish to keep private. By placing your business in a trust, you can ensure that your wishes are followed and your records are kept confidential.
Placing Your Business in a Trust
Generally, we think of trusts as being used to hold assets like financial accounts or real estate. However, as a business owner, you can work with your attorney to create a trust that holds your business. In the event that you are incapacitated or pass away, your trustee would carry out your instructions as detailed in the trust.
No need to go to court, and no need for your family members to try to rush around in order to figure out what needs to be done – or if they’re legally allowed to do it. Instead, your company would keep running and the person of your choice would take the helm.
It’s a bit more complicated than this, of course, but in the end the result would be the same. Your business would be managed by the people you choose, your clients would be served with excellence, your employees would keep their jobs, and your family would not have to focus on trying to figure out the details.
And yes – the team at Diamond Estate Planning Law can help you put everything in place.
Estate planning for your business can also help you when it comes to life’s other inevitability: taxes.
You’re probably well aware of the hassle that taxes can present. They only multiply in situations like this, and that’s not a hassle you want to leave to your family.
This is yet another reason that an estate plan for your business is a necessity.
From handling your company’s normal tax burden to protecting your family from having to pay unnecessary estate taxes, proper estate planning can save your company and your family a lot of money and a lot of headaches.
Getting the Help You Need
This isn’t something that you want to try to take on by yourself, though. Each state has its own laws, and proper estate planning for a business involves a lot of nuances. It’s essential to have an experienced team on your side. This is what we provide at Diamond Estate Planning.
Over the past few decades, our team has helped hundreds of families and business owners in McHenry and Lake Counties create estate plans that are tailored to their needs. We take the time to hear your story, answer your questions, and work with you to develop the plan that’s right for you – the one that will best protect your family, your company, and your legacy.
We also work with some of the best financial planners, insurance agents, and other professionals in the area. If you’re looking for someone to help you in those areas, just let us know – we’re happy to give you some referrals!
If you’re one of the 70% of business owners that don’t have an estate plan, it’s time to change that statistic. Call our office today – we’d love to help you create a plan tailored to your needs!
Disclaimer: Any information contained herein is solely for informational purposes and is only applicable in the state of Illinois. While it is important that you educate yourself, nothing herein should be construed as legal advice or create an attorney-client relationship. For specific questions, we urge you to contact a local attorney for advice pertaining to your specific legal needs.