As a business owner, it is likely that a significant portion of your wealth (and your family’s security) is intertwined with your business. You have spent countless years and immeasurable energy building your business. It is vital that you protect the value you have created. There are a number of tools that you should use to protect your loved ones and your business.
- A will and/or trust
Regardless of where you are in your life, you should at a minimum have a will. In the absence of a will, you have no control over the disposition of your assets when you die. A will sets forth how your final expenses will be satisfied and who will receive what assets.
If you are reading this blog, you will likely need a trust as well. A trust is, essentially, a contract that you create to hold and disburse assets. In the creation of a trust, you will place your assets in the trust and the trust will then disburse them. There are many benefits to a trust. The primary one is the ability to avoid the time and cost associated with probate. Probate is, essentially, a legal proceeding where you have to file a legal action to have the wishes outlined in your will effectuated. Depending on your particular circumstance, there may be tax benefits associated with a trust as well.
- A buy-sell agreement
If there is more than one owner in a partnership, corporation or limited liability company (LLC), then you should have a buy-sell agreement. This essentially enables you to predetermine the purchase price of your interest so that your heirs may be bought out upon your death. If you have an LLC, this can be included in your operating agreement. Also, the purchase price can be funded by insurance so that you can receive tax benefits in that manner as well.
- A succession plan
This is particularly helpful if you have a family-run business. A succession plan enables the primary owner/operator of the business to create a procedure for the business to be taken over by either another family owner or by a non-family operator. This is ideal to ensure the survival of the business through the transition of the owner’s death.
Through its unique lens as a business law firm, Gordon Law can help you protect your assets and your family through proper estate planning. Should you need to create an estate plan or want to have an existing plan reviewed, please contact us.