Estate planning attorney near me 10044
Estate planning attorney

Estate planning attorney near me 10044

Estate Planning For Business owners

Entrepreneurs are mostly concerned with how to improve on their businesses and hardly ever find the time to think about what would happen to this business should they suddenly get involved in a ghastly accident, become incapacitated or pass away. Even when you have an estate plan in place for your family, it is not enough if estate planning is not done for your business as well. Without estate planning, your hard-earned assets over the course of your lifetime may be reduced to rubbles in the twinkle of an eye. As an entrepreneur, it is time to sit down and reflect on what possible actions that could be taken — as regards your business — to protect your interest and that of your family, and then know what estate planning documents to establish that would serve that purpose.

Last Will and testament

Just as with family estate planning, a will is a very important document applicable to businesses as well. As an entrepreneur, you should choose a highly trusted and competent individual or financial organization as your executor, and this personality would be in charge of managing and disbursing your assets at your death or incapacitation. This person would have access to your bank accounts, email accounts and other digital assets of yours.

Revocable Living Trusts

There is one major advantage of a revocable living trust (RLT) over a will — avoidance of probate. A will is a highly public document and with it, the net worth of your business would be accessible to the public due to probate. Every will is subject to probate (a public legal process) and many people who hope to keep their net worth private may not want to use this in their estate plan. The complexities and cost of probate could also weaken the finances of a small business, and this is just another reason some young entrepreneurs avoid creating wills. The perfect solution around this is creating a revocable living trust. Once created, every asset transferred into the trust takes up the name of the trust while still allowing the trustor (the creator of the trust) the right to use the assets during his or her lifetime. A trustee could be named to manage the assets during the trustor’s incapacitation or death, and these assets will pass on to the designated heirs without passing through probate. To make an RLT most effective, the following assets should be included in the trust:

  • Investment accounts (including retirement accounts with see-through provisions)
  • Real estate (typically your personal residence)
  • Life insurance (so that minor children receive it constructively)
  • Entities (such as corporations and LLCs for rentals).

Durable power of attorney

There is always this fear of falling critically ill, being in a near-death situation, or becoming mentally unstable. As an entrepreneur, should such unfortunate incident come knocking, there should be a designated individual who would look after your business and keep it running while you are unable to run it yourself. With a durable power of attorney document, you name such a person.

Partnership agreement

A buy-sell agreement is crucial in every partnership business. There should be a legal agreement among the partners to establish a mechanism to redistribute a deceased or incapacitated partner’s assets in the business. Each owner should also have a life insurance policy.

Marital bypass trust

By the American Taxpayer Relief Act, the estate and gift tax exemption as at 2019 was fixed at $11.4 million, meaning an individual can leave up to that amount to his or her family without paying federal estate or gift tax. As a couple, this amounts to times two of that sum, i.e $22.8 million. However, with a marital bypass trust — also known as an A-B trust — couples can take advantage of both spouse’s personal tax exemption and double the total amount they can leave tax-free. The marital bypass trust works by creating two subsequent trusts at the death of a spouse, hence doubling the estate tax exemption.

Succession plan

Finally, there is need to draft a proper succession plan to effect the smooth transfer of ownership of the business after the death of the entrepreneur. The plan should designate the key players who would assume executive roles in the company engineer a framework to handle dispute, deal with and compensate family members.

Contact an estate planning attorney near you

Estate planning should be well tailored to suit each individual’s situation and to do this, you may require hiring a highly experienced and well-versed estate planning attorney near you.

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