When someone dies without a last will or estate plan, their assets will usually have to go through probate court. Even individuals who have carefully planned for the distribution of their assets when they die can still have their estates wind up in probate court.
Irregularities with the last will, legal issues with the state plan or a challenge brought by family members or beneficiaries can all lead to an estate going through probate unnecessarily. The larger and more complex your estate, the more likely it becomes that issues or objections will arise after you die.
Businesses are complex assets. If you are the sole proprietor or owner of a business, you have to think about what will happen with the company after you die. This is particularly important if you have employees who rely on you or if you hope that the business will continue to provide for your family members after your death. Proper planning is crucial to protect your legacy and your company.
Consider using a trust or changing ownership
One of the most straightforward ways to plan for the future transfer of ownership in your company is to start implementing minor changes now. If you have always wanted your child or a specific subordinate to take over your role at the company, it might be time to finally disclose that fact.
By taking the steps to empower someone to make business decisions, you can make the future transition easier for everyone involved. Instead of scrambling for a solution, people will be able to rely on your hand-picked successor for guidance.
If you don't feel comfortable with beginning to train someone to take over your position or giving partial ownership for management to another person, then you might want to consider transferring the ownership of your business into a trust. That way, your explicit wishes can guide the business during your life and after you die.
A trust can make it easier for you to separate business assets from personal assets and for you to control how people use your business assets after your death.
Other options may also be available depending on the structure of your business
Different kinds of businesses have different legal benefits and needs. Your business will have unique assets and considerations depending on what goods or services you provide and the legal structure of your business. The size of the company will also play a role.
There is no single plan that will work for every business out there. Discussing your company and your desires with an experienced business law and estate planning attorney can help you make wise decisions about how to protect the business you've built and your legacy.