Safeguarding Your Business to Safeguard Your Family
Over the course of your life so far you’ve built a business and it’s been successful at providing you and your family an income. It’s probably provided you some gray hairs too! Business ownership can be really stressful. It can also be lots of fun! Being your own boss is a gift. But let’s be real, it’s also a curse some days! I get it. I understand the joys and pain points of business ownership because I’m just like you: a business owner.
It’s normal to wonder or worry about what will happen to your family if you pass away. Your family is the thing you love the most about your life. And leaving them behind is a scary thought. It’s equally normal to wonder what will happen to your business if you pass away. You’ve put countless hours, blood, sweat, tears, a good measure hope, and your dreams into growing your business. Will it die too when you do? Is there a way for it to carry on? How does that even happen?
Estate planning can address both of those issues.
Businesses Involving Real Estate
Many people create LLC’s or other business entities that are solely real estate businesses. They may own one or more residential homes that are leased to families. Or perhaps they own short term vacation rentals and have listing through management companies or other vacation rental websites such as VRBO or AirBNB. They may also own commercial properties such as office buildings or strip malls with businesses that lease a space.
These properties can be valuable assets that bring in monthly income. At the same time the properties may still have mortgages on them.
You can create an estate plan that includes provisions for your personal residential property but also your business properties.
Service Businesses
Other individuals run businesses that provide services to community members. Think about the MANY different services available to you in our great world today. These business owners may be CPA’s, Lawyers, Doctors, massage therapists, nail technicians, life coaches, therapists, personal trainers, and countless other service providers.
Just because your business doesn’t own real estate doesn’t mean you shouldn’t include it in your estate planning. It may be a valuable asset that should be included!
Partnerships
Some businesses may be owned in partnership with another individual. This could be incredibly sticky if the other person in the partnership isn’t the loved one you want to leave your ownership rights to. It’s important to understand what the partnership agreement says as you do your estate planning. There may be clauses regarding buyouts or the way a successor partner is put into place.
If you are considering establishing a business partnership, our office can help you draft the contracts and provide advice for how these contracts can affect the way you do your estate planning.
If your partnership is already in place, we can review the agreement and make sure your estate plan aligns with the rules of it.
Estate Planning and Businesses
There are some things you can start working on now. It’s important to have a good set of books for your business, so that if you pass away the state of the company is clear in your accounting. It’s also important to keep an updated inventory of assets— be they real estate or product. Another thing to consider is a succession plan. Do you have a system in place to temporarily or permanently name your replacement? Do you have a plan to phase out, shut down, or sell the business?
Does this feel big or overwhelming? Are you worried that your business is going to be a burden too much to bear for your loved ones? Please don’t be paralyzed by something that feels big or complex!
You’ve become successful enough in your business that you turn profits every year. So many businesses cannot say that. You’ve learned your wheelhouse and you have excelled.
The good news for you is that I have too! And what I know is how to help business owners put an estate plan together that allows their families and, in many case, their businesses to thrive— even after they have passed away. This is my wheelhouse!
A bit of encouragement from one business owner to another: When I have to do my taxes, I go to a CPA. As a business owner with questions and concerns about how to do an estate plan for you and your business, I implore you to go to an estate planning attorney. You absolutely need a Will, and more than likely need at least one, but potentially multiple, Trusts to properly handle your personal and professional assets. This is not something you want to DIY. It is worth it to hire a professional who deals with this type of thing every day. In the long run, it will pay for itself— and you’ll breathe a sigh of relief when you’re done. Because the plan is in place and your family and business will be taken care of.
If you’re worried about how your business fits into your estate plan, please reach out! We are here to help! Call us at (404) 736-6066 to schedule a consultation.