If you run a family business, you might want it to continue after you pass away. To ensure your business succeeds once you are gone, you must create a succession plan. This is an essential part of estate planning for any business owner.
Planning how your company will continue is crucial to protecting the wealth of your family. There are a few different ways you can transfer the business, and here are some of the most common methods:
Did someone just designate you as a trustee? If so, you probably have plenty of questions. As a trustee, you are legally responsible for handling any assets that are in the trust.
It is crucial to understand your responsibilities as a trustee so you can act in the best interest of the grantor (the person who set up the trust and named you as trustee). Here is a quick guide to being a trustee.
As a sole proprietor, you likely spent a good deal of time, energy and effort to build and grow your business. Perhaps you are nearing the time other people retire, so it is natural to think about long-term plans for your business. Or maybe you are younger and heard about someone who got seriously hurt or killed in a car accident. What would happen to your business if you were involved in a similar accident?
One key thing to understand is that you at least need a will. This is because sole proprietors' business assets are treated the same as if they were personal assets. Die without a will, and your business could end up with someone you would rather not have it.
If you already have an estate plan, congratulations! That is an important step that many people procrastinate for decades. However, even though this achievement is complete, remember you need to check up on it every now and then.
Your life changes a lot over the years. You want your estate plan to reflect your shifting circumstances. It is crucial to consider whether you need to adjust your estate plan. Here are some signs you need to review it.
While not everyone who works on an estate plan will need a trust, or a specific fiduciary arrangement that allows a third-party trustee to hold on to assets on behalf of someone else, as a parent of the disabled, you very well might. Providing a lifetime of care for your child, whether he or she has autism, Down syndrome or another type of disability, can prove extremely expensive.
A special needs trust is one way to help safeguard your disabled child’s future while doing your part to ensure your child has everything he or she needs after your passing.
If you recently had your first baby or are planning to have one in the near future, your mind may be racing with questions. Will you be a good parent? Will labor and delivery go smoothly? Have you done everything necessary to protect your new or future offspring?
As a new parent, you may worry more about whether your child is getting enough sleep or food than whether you have all your estate planning ducks in a row - but that does not make the process of doing so any less important. As a new parent, there are three particularly important estate planning steps you can take that can protect your children and prevent unnecessary problems and expenses down the line. More specifically, as a new parent, it is important that you:
Your parent has recently died, and you cannot find his or her will. You are fairly sure there was one governing what should happen to the estate. Perhaps you even know one existed and what was in it. You just cannot find it.
What does this mean? What can you do?
As you age and begin creating your estate plan, one of the things you may want to consider is who you want to grant power of attorney in the event that you become incapacitated or otherwise unable to clearly express your wishes on your own. Often, the person you choose for this role is someone in your own family, but this does not have to be the case as long as you appoint someone you believe you can rely on to make decisions based on your best interests.
There are two main types of power of attorney; a durable power of attorney for finances and a medical power of attorney.
You may have all your personal estate planning complete, but have you planned for your exit of the family business? Do not just assume that you can leave it to a family member or sell it to a new owner and all will be well. No matter the exit strategy you choose, you need to have a plan for it.
However, do you know what a business succession plan entails besides naming a successor? Here are just three of the many things to include in your plan to ensure the continued success of your business.
The purpose of an estate plan is to ensure the proper handling of a decedent's or incapacitated person's assets. When an appointed person does not fulfill relevant duties or, worse, mismanages the assets for personal gain, it is a breach of fiduciary duty.
Understanding the laws concerning a breach can help you determine if it applies to the estate management of a loved one so you can take corrective legal action against the violator.
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