business succession planning

Serving Southwest Florida

Helping clients plan for their family's future, by creating an efficient, thoughtful and comprehensive estate plan that preserves their legacy and gives them peace of mind.

What Does Pandemic Estate Planning Look Like?

In the pandemic, it’s a good idea to know your affairs are in order. If you already have an estate plan, it may be time to review it with an experienced estate planning attorney, especially if your family’s had a marriage, divorce, remarriage, new children or grandchildren, or other changes in personal or financial circumstances. The Pointe Vedra Recorder’s article entitled “Estate planning during a pandemic: steps to take” explains some of the most commonly used documents in an estate plan:

Will. This basic estate planning document is what you use to state how you want your assets to be distributed after your death. You name an executor to coordinate the distribution and name a guardian to take care of minor children.

Financial power of attorney: This legal document allows you to name an agent with the authority to conduct your financial affairs, if you’re unable. You let them pay your bills, write checks, make deposits and sell or purchase assets.

Living trust: This lets you leave assets to your heirs, without going the probate process. A living trust also gives you considerable flexibility in dispersing your estate. You can instruct your trustee to pass your assets to your beneficiaries immediately upon your death or set up more elaborate directions to distribute the assets over time and in amounts you specify.

Health care proxy: This is also called a Designation of Health Care Surrogate. It is a legal document that designates an individual to act for you, if you become incapacitated. Similar to the financial power of attorney, your agent has the power to speak with your doctors, manage your medical care and make medical decisions for you, if you can’t.

Living will: This is also known as an advance health care directive. It provides information about the types of end-of-life treatment you do or don’t want, if you become terminally ill or permanently unconscious.

These are the basics. However, there may be other things to look at, based on your specific circumstances. Consult with an experienced estate planning attorney about tax issues, titling property correctly and a host of other things that may need to be addressed to take care of your family. Pandemic estate planning may sound morbid in these tough times, but it’s a good time to get this accomplished.

Reference: Pointe Vedra (Beach, FL) Recorder (July 16, 2020) “Estate planning during a pandemic: steps to take”

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How Can I Use Estate Planning for My Small Business?

All business owners would like to live long enough to see their business become successful, but there are no guarantees.

Legal Scoops’ recent article entitled “3 Ways Estate Planning is Used in Small Business” says that estate planning can work to keep your dream alive and help keep your business thriving after your death. Let’s look at some ways that estate planning helps small business owners.

  1. Protection from Unfamiliar Owners with Buy-Sell Agreements. Small businesses are frequently partnerships between family members or friends. However, one of the owners will die before the other, and if this occurs, the business may be in jeopardy if a buy-sell agreement isn’t in place. Buy-sell agreements can make certain that family members of the deceased don’t gain control of the business. It also automatically allows other owners to buy the owner’s share in the company.
  2. Implementation of a Succession Plan. A succession plan can identify and develop new leaders and key people to fill business objectives. Succession plans are implemented long before an owner’s death, so their wishes can be upheld. A succession plan can also decrease the chance of family arguments that come after a person’s death.
  3. Elimination of Unnecessary Taxes. A business that’s operational and successful will have assets and significant tax burdens for heirs. If a majority of your wealth is tied into a business, you must take action to help remove these unnecessary tax burdens from your business. Business owners can do one of the following:
  • Gift family members shares in the business, while they’re still alive
  • Redeem stocks at a lower tax rate than cash; or
  • Estate taxes can pay estate taxes in installments.

When a business is illiquid, heirs may not be able to pay the 35% – 50% estate tax on the business.

To help you with your business succession planning, contact an experienced estate planning attorney to make certain that your family is financially sound after your death and that your legacy continues on with your family business.

Reference: Legal Scoops (July 14, 2020) “3 Ways Estate Planning is Used in Small Business”

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