When Business Owners Die Without a Last Will and TestamentBy James Blake on
No one likes to think about their own death, and sitting down with an attorney to draft a last will and testament is often a difficult mental challenge for people to face. While it’s important for any person to draft a will, it’s especially important for business owners to think about their business and what its future will be at a time when the business owner is no longer able (or alive) to be actively involved in the business. For some business owners, drafting a business succession plan, a last will and testament, and the appropriate power of attorney documents can add significant security for their company. Failure to do so can have nasty results for the company and for your loved ones.
Business Succession Planning
Your death or disability might cause your business to devolve into an unorganized and unprofitable mess if you do not arrange a business succession plan that is coordinated with a last will and testament or a trust. If you die without a will or a trust, your interest in the business will go to your heirs according to the state laws of intestacy. As a result, your business may pass into the hands of heirs who are unable, uninterested, or unwilling to run the business that you worked so hard to build. Additionally, the lack of clear ownership, control, and leadership during the time it takes to probate your estate may devastate your business. Your business may suffer in a similar fashion if you become disabled and have not executed a succession plan and the appropriate power of attorney documents to give control to a competent person.
Estate Planning to Reduce Taxes
If you haven’t taken the time to draft a last will and testament or to devise a trust to hold your business interests, then you most likely have not arranged for other estate planning mechanisms that can help save your estate from an outrageous tax bill that may become due on your death. In some cases, your estate may not have enough liquid assets to pay the taxes, requiring the sale of your company or its assets. In such a scenario, you may not be able to pass your business on to the people that you would like to control and benefit from the company you worked so hard to build.
In some cases, simply having a last will and testament might not be the ideal option for you, and setting up a revocable trust may be a better way to save taxes and pass control of your business seamlessly. The Blake Law Firm advises business owners in succession plans, wills, and trusts, and will be happy to consult with you to develop a plan that works for your needs.