04/08/2021
What is… special about estate planning for business owners?
At Landry Law, we love working with clients across the business law, tax law, and trusts & estates practice areas. Tax law is essential to both trusts & estates and business law work. Beyond that, handling estate planning and administration for business owners is a crossover that comes with a few special considerations. We’ll go through the top ones here.
First, business owners generally want to be sure to protect themselves, their loved ones, their business(es), and their assets from each other. With proactive and continual planning, this is possible. When initially establishing a plan, it is important to consider the weighting of each in order to establish the foundation and ongoing work. That could be its own series of posts! What is most essential once the plan is established, however, is to maintain it: do all the right things and keep your advisors up to date on changes in circumstances, goals, and plans.
Second, business owners need to have a business succession plan in place. This is discussed in past posts, but having both emergency and long-term succession planning makes sure that your business continues even if you become sick temporarily, permanently incapacitated, or die.
Third, business owners need to incorporate their business into their estate plan. Sometimes, the business owner does not do so, and the existence of the business throws the entire plan, whether based on value or creating a need for probate. In trust planning, many business interests can be transferred to trust, which not only assists in avoiding probate but also allows for the business to truly continue without interruption regardless of any changes (your illness, incapacity, or death, change in plans, or change in who will take care of or inherit the business).
Fourth, many business owners do not discuss the business operations or have the information readily available in any form. As part of your business and estate planning with Landry Law, we go over ways to maintain business records and have conversations with people to let them know how to access it, when to access it, how to get up to speed, and what to do. This can all be done without providing them immediate access or control.
It is a sad reality that many businesses fail due to an emergency happening during the owner’s lifetime (an extended hospital stay, car accident, etc.) or following the owner’s death due to a lack of planning. With planning, you and your loved ones are prepared. The business can continue to operate, preserving its value and operations. You, your loved ones, your business, and your other assets are protected in this way – it all comes down to proactive planning and administration.