Uncertainty is an integral part of life. It is one of the things you cannot change or control in life, however, you can plan in advance to prevent an uncertain event from turning your life or the lives of people close to you upside down. Your business is your legacy. As a business owner, it is not just your right, but your responsibility to ensure that your business survives and thrives after you. If you have already not talked to your business lawyer in Santa Rosa about estate planning, now is the time to design a plan that fits your needs.
Many small business owners think that estate planning is only for big companies. Nothing could be further from the truth. Irrespective of the net worth of your business, you need to come up with an effective estate plan to ensure your instructions regarding the management of your business are carried out.
When creating your estate plan, the first step is to assess the nature of your business assets. What is the nature of ownership? Is it in the form of stock or shares held in a corporation or a membership interest in a LLC (limited liability corporation)?
Go through the details of agreements, if any, that you have with your partner/(s) or other owners. Small business owners must pay special attention to shareholder agreements, partnership agreements, limited liability company operating agreements, and any other agreements that may impact how their share in the business is distributed on death.
If the life insurance is owned, other partners can buy-out a deceased partner’s share. Ask your estate lawyer to review these agreements. Before starting to work on your estate plan, it is important that you develop a rough idea of the value of the business interest.
Before the time of estate settlement arrives, compute the value of business assets for possible estate tax issues. This step is also necessary for determining income tax payable on the income generated through the sale of assets.
You also need to decide the intended beneficiary of the business interest. Decide whether you want to designate a person who is interested in and capable of assuming authority required to run the business after you. Choose a beneficiary with a good head on their shoulders; someone who can get along with surviving partners.
Be very careful when choosing your administrator or executor. Remember, the more efficient your estate’s administrator, the better the execution. Look for a diligent individual capable of coming up with a comprehensive plan to deal with the business interests of your estate.
Looking for a business law firm in Santa Rosa that deserves your trust? Look no further than Johnston Thomas Law. We are a seasoned legal team. Over the years, we have successfully helped several businesses chalk out their legal strategy. As one of the top law firms in Santa Rosa, we are committed to delivering top-notch services. To discuss your requirements with one of our legal experts, call us at 707-545-6542.