The Tough Part of Business: Estate Planning Tips NYC
Estate Planning Tips
If you are an entrepreneur, you have probably set up your business with your own sweat and blood. You worked hard through the years to improve your brand and make it credible for target audiences. Now, as you stand on the precipice of success, it’s time you thought about planning for the future.
Do you know what will happen to your business if you fall sick, or worse, pass away? Will the shares be transferred to someone else? Who will be the beneficiary of your company name? These are important questions that will decide crucial aspects of the inheritance legal procedure—and you need to make some decisions with the help of your attorney.
Estate planning is usually a personal matter. But if you own a company or have high stakes in one, it makes sense to start looking for estate planning attorneys in Manhattan.
But before that, let us teach you some basics about business estate planning.
Touching on Some Basics
So what is an estate plan? An estate plan is a document that explains in detail what will happen to your possessions after you die. There’s another clause that is concerned with appointing a personal healthcare proxy, but it’s not relevant for this discussion.
Let’s start with wills. A will is an important document that legally announces the heirs to your assets after you pass way—including all your business shares. You can also use a will to assign one person the responsibility of making sure your will is executed. The problem is whether you have a will or an executor, you entire estate will have to go through probate.
Now a probate is a legal procedure that determines the reliability of your will. And it takes a long time to process and it costs your heirs extra. If avoiding a probate is up-top on your list of priorities, you need an attorney in NYC to set you up with a living trust.
Is a Living Trust Good for Me?
Wills are just pages from the past. If you really want to help your inheritors their precious time and money avoiding the whole probate process, a living trust is your best bet. A living trust is revocable; meaning that it can be managed or changed at any given time. It gives the owner and their heirs several benefits along with an escape from a lengthy and tedious probate.
Confidential
When your estate goes through probate, its contents become public property. Maybe this is not a matter of concern for some, but if you are a business owner, you cannot afford private company information to be accessible for the public—or worse: for your competitors. In such a case, a living trust can help you keep information private and safe.
Changeable
Since a living trust is revocable, you have much more room for changes compared to a will. Plus, after the probate process is complete, the entirety of your estate is passed on to your heirs. Have you ever wondered what a teenager might do with a large sum of money? We can pretty much guarantee they won’t make wise choices.
A living trust lets you appoint a trustee, who will be responsible for the state until a designated time period is over.
Assigning a Power of Attorney
If you’re an avid watcher of the TV show based on lawyers (like say, Suits), you must recall hearing these three words time and again. On shows, it is little more than a plot device, but assigning power of attorney is a crucial task that requires caution from you.
A power of attorney is one person that you have made in charge of your personal health and financial matters in case you are not able to make decisions for yourself. The second clause is important, since the power of attorney is only potent if you are incapacitated—it stops being valid when you die.
For a corporate enterprise, having a proper power of attorney is crucial. This one person can take care of financial and company matters when you can’t. You can choose your business partner, your spouse, or another family member for this responsibility.
The Future of Your Company
There are other ways to secure the future of your company well. Here are two popular ones for your consideration.
Buy-Sell Agreement
If your company has several owners will various chunks of the shares, you can decide how your shares will be redistributed when you die. Through this agreement partners will have the first right to purchase these shares.
Business Succession
If you want a comprehensive plan determining how your company is going to run without you there, a business succession plan might be for you. It’s like a letter of instructions; all others need to do is follow it to the T!
You are right in assuming that estate planning for a business is a complicated task. Not only is there a variety of new terms you must acquaint yourself with, but the options in front of you spoil you for choice! We would suggest finding a good estate planning attorney in NYC to help your case along!
