Estate planning methods offer significant benefits for all business owners. By establishing a strong estate plan, a person can safeguard not just a business, but employees and potential heirs, as well. This article will review some of the most important elements about how estate planning applies to people who own businesses.
Create a Will
Wills that are properly written help provide strong directions about how assets associated with a business should be managed or distributed when the business owner dies.
Revocable trusts are much more complicated wills and allow an entity to hold assets for the business owner while they are alive. A business owner need not die for a trust to become effective. Instead, a designated party can also assume management of a trust if the business owner or trust creator becomes incapacitated. A revocable trust facilitates the transfer of assets, which helps to avoid extended legal proceedings as well as expenses that are commonly associated with legal cases.
Power of Attorney Documents
Powers of attorney allow a designated representative to make medical decisions on a business owner’s behalf in case he or she becomes unable to make decisions. Financial powers of attorney are important and let a designated party pay bills and make financial decisions on behalf of an incapacitated person.
Buy Sell Agreements
A buy sell agreement is an estate planning tools that helps to make sure that a business transition proceeds in an efficient manner as well as achieves a family’s financial goals. Buy-sell agreements also distinguish the terms of succession among heirs and business partners, which helps to avoid debates about this decision after the creator’s death.
If a business owner dies, there is a risk that estate taxes can take a significant portion of that person’s business. For many business owners, these taxes often cause them to make undesirable business decisions to obtain liquidable assets to pay the amount that is owed. A skilled attorney, however, can discuss the various options that a person can apply to reduce the amount of taxes that are ultimately owed.
The Advantage of Charitable Trusts
Charitable trusts are an attractive option for some business owners who want their assets to pass on in a charitable manner. These trusts let business entities donate their assets to charitable causes that support a specific interest. Based on what plans a business owner has, the advantage of charitable trusts might be desirable.
Contact a Knowledgeable Estate Planning Attorney
There are numerous complications that small business owners experience when estate planning. To make sure that their estate plans are properly executed, business owners often find it essential to obtain the services of a knowledgeable estate planning lawyer who can make sure that proper steps are taken to preserve their assets. Attorney Jim A. Lyon has helped many people with estate planning. Contact attorney Lyon today for assistance.