The statistics on trusts and wills are frequently discussed. There have been numerous reports that point to the fact that many people do not care about drafting an estate plan. Life insurance is an additional aspect of planning for the end of life that is often ignored.
In general, it’s not until people age or have dependents that the end-of-life planning becomes more important.
Although it does require a certain amount of pragmatism, planning your estate is vital to ensure your loved ones are cared for in the event of your death.
For business owners there might be a greater degree of importance to ending-of-life planning.
A Last will and testament is not enough. An extensive estate planning plan is essential if are an owner of a business.
What is exactly the definition of estate Planning and what is It?
The lawyers at Two Spruce Law P.C. located in Bend Oregon were asked to describe the process of estate planning and the process involved.
There are numerous elements and areas that are involved in the estate plan, as well as legal help is often required. Particularly when complex assets are involved.
Estate planning covers these areas of planning:
- Wills
- Trusts
- Charitable legacies
- Beneficiaries
- Power of attorney
- Business succession
Other elements of estate planning include custodians and proxies. The planning for healthcare is a possibility as well.
Estate planning could include health directives that permit you to specify your preferences regarding medical treatment options should you be unable to do so.
Estate planning is a method of arranging the financial affairs of a person and set up guidelines to distribute assets. It’s just a way to ensure that your desires will be fulfilled when you die.
If you don’t have estate plans, you’ll not be able to control how your assets will be distributed or how your legacy could be distributed.
The estate planning process allows charitable trusts to be created too. It is possible to wish for your estate to go certain charitable organizations upon your passing away.
Wills and Trusts are a fundamental part of Estate Planning
Writing a will is a good way to ensure that your possessions and assets are transferred to the people you have chosen as beneficiaries. This will allow you to support your dependents after you die.
A will can be used for the appointment of guardians, and even funeral plans. Trusts are different.
By establishing a trust, you choose a trusted person to oversee your assets in the event that you are unable to work due to illness or death.
There is also your business to take into consideration. It is necessary to conduct an business valuation of assets to assess the worth of your business. In the next step, business succession plans are required to be implemented.
This is only one method that estate planning can help business owners.
Why should business owners be worried about estate Planning?
Most people just need to make a basic will. Simple estates that do not have complex financial issues are simple to divide and leave to loved relatives. But, business owners have more complex estates.
Think about your own company. Are you the sole owner of it or do you share ownership with an investor? What are the debts that you have to pay for the company? What are the best ways to protect your company in the event that you die or are disabled?
Estate planning is required by business owners to ensure smooth transitions and continual operations even when the CEO of the company dies. Unfortunately, death can result in disputes, legal battles and tax-related issues.
Estate planning for business succession allows owners to define an easy route to transfer to the successors they choose. Estate planning lawyers can draft plans that do not allow for confusion or ambiguity.
A solid business succession plan can remove any obstacles and let a company continue to operate as usual. However, there are additional advantages for business owners, which you will see below.
1. Asset Protection
If you pass away It is possible that some individuals will come through the bushes to claim your company’s assets.
Legal asset security needs estate planning lawyers to ensure that the worth of a company is protected.
There are, of course, ways to conceal assets and shield these from IRS as well as creditors.
However, this shady practice can only hurt your business over the long-term. Estate planning lawyers protect assets legally and defend them from creditors.
2. Protect yourself from taxation
There aren’t many things that can be that can be guaranteed in this modern world. However, as the fabled phrase says, taxes are just among them. In the event that assets pass to beneficiaries some taxes might be payable.
Tax on gifts and estates can be considered. With a smart estate plan an approach can be implemented to minimize tax burden.
3. Dependent’s Financial Security
The most important aspect of estate planning is deciding which assets to pass on to whom.
Wills and trusts allow individuals to give financial protection to their dependents and partners. The same is applicable to entrepreneurs as well as individuals.
To ensure that your wishes are fulfilled in the matter of distribution of the business’s assets Estate planning must be implemented. So you’ll be able to rest assured that your family members will be able to receive their inheritance.
4. Protection for the Important Employees
Insurance policies are that can be purchased to safeguard the crucial employees who businesses cannot do with.
Executives, top salespeople and everyone else who is essential to the success of a company should be protected.
Estate planning can allow you to create a plan to protect and compensate employees.
5. Contingency Planning
The majority of business estate planning involves contingency planning. Implementing buy-sell agreements to safeguard the business partners or employees is only one example.
If you die, your business may collapse if there isn’t having a contingency plan.
Making an estate plan is a way to make provisions to deal with the unpredictable events that life will provide.
People die unexpectedly. Accidents can happen. and serious illness can strike without warning.
Contingency plans are an integral part and integral to creating the business to be successful. It is the same to help businesses survive even after the business’s owner or persona dies.
The implementation of contingency plans ensures that power of attorney will be in place before the worst can happen.
The people you trust could be appointed to manage certain areas of your company and help with the continuity of your business.
6. Goals for Assets in Business and Personal Life
The owners of businesses also have personal assets. This is one reason estate planning is more complicated for entrepreneurs than for ordinary people.
Anyone can make will without the help of an attorney. There are even sites where wills and legal papers as well as divorce papers can be downloaded. However the estate plan for entrepreneurs needs professional legal advice.
Lawyers who specialize in estate planning will assist business owners evaluate their own and business goals to distribute assets.
The way your assets are transferred will be clearly defined in your written instructions. This way, your wishes will be fulfilled no matter if the assets are yours or your company.
Summary
Estate planning is a way to prevent conflict and arguments following the death of a person. An estate plan that is properly drafted can prevent probate, and cause more grief for grieving loved ones.
A business owner’s estate planning is crucial for naming successors and safeguarding the assets of the company.
When it comes to financial matters the wishes of the deceased must be clearly stated. Instructions and directives should be clear and unambiguous.
Thus, estate planning lawyers are essential for business owners in order to reduce tax burdens and safeguard the assets against creditors.
