How an Estate Planning Attorney Helps Small Business Owners

How an Estate Planning Attorney Helps Small Business Owners

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If you own a small business, it is vital that you take the necessary precautions to protect you company's name and assets now and after you die. Small business owners who want to pass their businesses along to family members after their deaths need to make sure that the business assets are not absorbed by the estate. When business assets enter probate, it can take months or years for family members to claim their inheritance. This can drastically affect the state of a business. To prevent this from happening, sole proprietors need to speak with a qualified estate planning attorney in Simpsonville, SC.

When the topic of estate planning and wills is brought up, the word probate is repeated often. But do you really understand what probate is and what it means for your assets after you die? As a business owner, it is critical that you learn as much about the probate process and what it can mean for the survival of your business.

Probate is a legal process in the state of South Carolina that organizes and distributes the assets of a deceased person. Assets that are contested by family members may automatically enter probate, but if you die without assigning your assets to the appropriate parties, the estate will definitely go into probate. A probate judge is then assigned to the case to figure out the best way to divide the assets. Assets are distributed to heirs, creditors, and other interested parties.

This is a person that is designated by the business owner who will take over the management of the business in the event of the owner's death. This person should clearly be named in the last will and testament documents. It doesn't matter who the person is. They could have played an active role in the business from the beginning, or it could be an heir. However, it is important that the person understands that they will immediately step up and take over the management of the company, its operations, employees (if applicable), and business contacts. Designating a successor allows a business to continue to operate without interruption.

The probate process is long, tedious, and exhausting. The best way to avoid putting your heirs through the process is to develop a concise estate plan. Unfortunately, many small business owners fail to do this. Either it is because they don't see the importance of securing their business assets or they don't have a successor in mind to continue the business.

The last reason is a very real possibility because of the vast number of start-ups that pop up year after year. Years ago, small businesses were family run and it was a given that the next generation would continue to operate the business. But these days, family businesses are in decline, and many people don't have the same entrepreneurial desires as their parents or grandparents. Many people start small businesses to fulfill a personal goal or to provide a modest lifestyle for their families. They don't have any intention of the business becoming their legacy. However, that shouldn't stop your family from benefiting from your hard work. The last thing you want is to die and have the income from your business to be distributed incorrectly to your loved ones.

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If you don't have plans to leave your business to your heirs, speak with an estate planning attorney in Simpsonville, SC. He or she will be able to assist you with taking the proper precautions to set up trusts, and other protected accounts, that will make it easy to transfer your business assets to your heirs without the need for probate.