Is Just A Will Enough To Protect Your Small Business?

THE ISSUE – You own a small business, you only have a will, and nothing else…

When it comes to estate planning, creating a will is usually what people think they need. However, simply leaving your business to someone in your will may not be the wisest choice. Let me explain why.

When assets are passed through a will, they must go through a court process known as probate upon your death. Not only can probate take a long time to complete, but it can also be quite expensive and disruptive to your business operations and cash flow. Plus, probate is a public process, which means that your business affairs could potentially be exposed to competitors.

Even if your family and team members know how to run your company after you’re gone, they may not be able to access crucial assets, such as financial accounts, until probate is concluded. And probate could take months sometimes stretching longer than a year or more to resolve. This could cause unnecessary delays and headaches, not to mention the legal fees can quickly deplete your company’s funds.

Furthermore, disputes may arise during probate, especially when a highly profitable business is at stake. Suppose your heirs disagree about who should control your business and how the assets should be divided. In that case, a court battle can ensue, dividing your family and causing significant harm to your business.

THE SOLUTION – A Revocable Living Trust

While a Will can be a useful tool for distributing assets after one’s death, for business owners, additional measures are often necessary for a smoother distribution of both personal and business assets.  A Revocable Living Trust can be a much more effective option.

A revocable living trust allows you to retain control over your business during your lifetime. You will retain the power to alter or terminate the trust at any time, and the trust assets are exempt from the probate process upon your death.  Depending on your business structure (LLC, S-Corp or C-corp) there a variety of ways to assign your business to your revocable living trust while also ensuring your operating agreement or bylaws designate successors for the management rights and economic rights of your business in case you are temporarily incapacitated or upon your passing.  That way your successors can get immediate access to your business and your accounts to ensure it is managed for your benefit while you recover from your incapacity or passed to your heirs without court involvement and done in attorney’s offices. Given its flexibility, a revocable living trust can be customized to meet your unique needs and goals. A revocable living trust is a great option for business owners seeking to preserve wealth, minimize tax liabilities, and avoid the disruptions and expenses associated with probate.

Are you interested in finding out more about how you can protect your business interests, and the interests of your heirs? If so don’t hesitate to contact me today. Let’s schedule a 15-minute discovery call and get started securing your future!