How many countless hours of your life have you devoted to making your business succeed? That time spent balancing your books and juggling tasks–not to mention all that time spent thinking about your business during your “off hours”–demonstrates a heroic dedication that sets you apart from the pack.
Yet you, like many small business owners, are probably doing your best to keep estate planning out of your mind. Particularly if your venture’s upward momentum back in the “good old days” was abruptly set to perpetual idle by the Recession, you find that adding one more problem to solve is hardly the most appealing prospect.
Here’s some good news: though estate planning is never simple–especially when a business is involved–there are a four easy questions that can help you determine where you’re at and what you need. Wouldn’t you prefer to look ahead, down that long, winding path of life, and know with certainty that your loved ones (your business included!) are taken care of?
Contact an experienced business lawyer like me for a consultation and pose these questions:
I have written a last Will and Testament – can you review it with me to make sure it’s correct?
Of course! Bring your existing Will with you when you visit, and we’ll let you know what it says (along with what it means). Many times there are only minor changes that need to be done, and a whole new Will isn’t needed. A simple Codicil (which is a fancy word for “amendment of a Will”) can update your directions.
Do I need a buy-sell agreement for my business?
Say your business partner passes away. Would you really look forward to going into business with their spouse or children? Probably not, so set about establishing a buy-sell agreement immediately in cooperation with the other owners of your business. With the appropriate structure, a buy-sell agreement enables your deceased or disabled partner’s ownership interest to be purchased by the other owners or by the business itself. Get this done sooner than later or risk exposing your business to significant uncertainty.
Do I have a taxable estate?
That depends on its size. Current federal exemptions are relatively generous, imposing the tax only on assets valuing above $5,340,000 for those who die in 2014, but remember that Minnesota estate tax exemption is significantly lower at $1,000,000. Remember, only those assets above the exempt portion are subject to this tax. However, take care to fully appraise your existing estate – your taxable estate includes business interests, real estate, bank accounts, vehicles, retirement accounts, life insurance policy proceeds, and property held in revocable trusts. Your net worth may well be more than you initially estimate and you want your family to know whether the tax will affect them or not. Speak with a Creative Business Lawyer about both whether you qualify for the tax and what avenues are available for protecting your assets if you do.
What should I set up for my kids? They’re under 18 right now and if I die unexpectedly, what can I do to make sure they’re provided for?
If your children are still in school, now might not be the best time to drop a fortune in their laps. A trust or trusts can be established for the inheritance you are passing to your children, protecting them from overindulgence or poor financial planning. Grandchildren, too, can be designated in a trust that skips the generations. There is a wide array of options for trusts, so there’s no reason you can’t keep your 19-year-old from heading to Vegas in his new sports car on the wealth you spent your entire life building. Consider a monthly stipend until they have reached a certain age, or even placing the requirement that they first finish college. You want to support them, not spoil them.
If you’re a small or mid-size business owner, call us today at (612) 206-3701 or fill out our contact form to schedule a business consultation session.
By Runner1928 (Own work) [CC-BY-SA-3.0], via Wikimedia Commons