Owning your own business is certainly rewarding. But it also comes with great responsibility. You may have employees. Or you may have important contracts or assets to protect. Whatever the nature of your business or level of success, it is important that you think about and prepare for possible future events.
Unfortunately, many business owners don’t think about estate planning for their business. According to statistics, approximately 30% of business owners don’t have an estate plan.
For example, have you ever thought about what might happen if you were met with a tragic accident on the way to work and were incapacitated or worse, died suddenly? Who would run your business? Do you have someone who can step in to deal with customers and vendors, or to sign payroll checks?
These are just some of the questions you should ask yourself, or better yet, discuss with your estate planning attorney if you own a business.
Why?
Unless you have an estate plan for your business, state law will dictate who takes over when you die. In Florida, that generally means that the surviving spouse will take over:
(a) if you die without issue (i.e., you have no surviving children), or
(b) if either you or your spouse had children outside of your current marriage.
If you or your surviving spouse had children outside your marriage, the estate will be divided half to your surviving spouse and half to your children.
Florida’s estate plan (intestacy laws) may work for you and your business, or it may not. You may not want your spouse and your children running your business. They may not want to. Your business partners may not want spouses or children involved in running the business. There are so many facets to any business and family situation that it would be impossible to run through all the potential scenarios. But you get the idea. Unless you have an estate plan in place for your business, your business will go through probate, and by the time the probate court appoints a personal representative, your business may have already folded, leaving your family with no income and nothing to show for your years of hard work.
3 Things to Do Now
So, to avoid complete disaster, here are 3 things you should do right now if you own a business.
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At the very least, get basic estate planning documents put in place.
To avoid complete disaster and probate, Florida estate planning and probate attorney, Samantha Fitzgerald, recommends that all business owners get at least the basic estate planning documents executed as soon as possible.
At a minimum, you want to have a Durable Power of Attorney in place to allow someone you trust to handle the business finances and run the company in the event of your death or incapacity.
But you should also have other necessary documents to keep your business running and out of probate, like a Last Will and Testament (“Will”) and a trust.
As always, the right estate plan for you depends entirely on the unique facts of your situation, so always consult with an experienced estate and probate lawyer.
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Create a succession plan.
Whereas a Will describes who should receive your estate and outlines your wishes regarding who you may want to run your business when you die, a succession plan is primarily concerned with keeping the business running.
A succession plan requires identifying people within the business who are best qualified to take over and run it in your absence. It can greatly assist in making the transition to new management run smoothly.
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Figure out the impact of taxes.
As they say, like death and taxes, inevitability is inevitable. So if you own a small or family business, it is advisable to consider now how estate taxes may affect your estate at the time of your death.
Depending on the business and your particular situation, you may be able to use various strategies to minimize your taxable estate.
Again, due to the complexities here, be sure to consult with a professional tax adviser and your estate planning attorney.
Ready to Protect Your Business and Your Family?
Estate planning is more than just property division. It’s about making sure everything you’ve built continues to protect the people who matter most.
At SJF Law Group, we work with Florida business owners to create estate plans that address succession, incapacity, tax planning, and probate avoidance, all within a single coordinated strategy. We offer flat-fee pricing, a 100% money-back guarantee, and complimentary annual reviews to keep your plan current as your business evolves.
Call us at (954) 580-3690 or schedule your free consultation here.
