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.
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 and deal with customers and vendors or sign payroll checks?
Because unless you have an estate plan for your business, when you die, state law will dictate who takes over your business. 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 of your marriage, then 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.
- At the very least, get basic estate planning documents put in place.
To avoid complete disaster, and probate, Samantha J. 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 have other necessary documents that can 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.
- Create a succession plan.
Whereas a Will describes who should get your estate and outlines your wishes concerning who you may want to run your business when you die, a succession plan is much more concerned with keeping the business running.
A succession plan requires identifying people in the business who are best qualified to take over and run the business in your absence. It can greatly assist in making the transition to new management run smoothly.
- Figure out the impact of taxes.
As they say, like death, taxes are inevitable. So if you own a small business or family-business, it is advisable for you to consider now how estate taxes may impact 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.
Estate Planning attorney Samantha J. Fitzgerald
Estate planning is more than just property division. It provides protection for your loved ones and peace of mind for you. At the Law Offices of Samantha J. Fitzgerald, we work hard to ensure that your wishes will be followed, and your loved ones taken care of when you are gone. When you work with the estate planning attorneys at the Law Offices of Samantha J. Fitzgerald, you get more than just an estate plan: you get peace of mind. Connect with us on Facebook or Instagram or email us at: [email protected] today.