Business Owners Should Have a Living Trust

Dec 12, 2010  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Small Business Planning

If you are a business owner there are several reasons why you may want to have a living trust instead of a will. One of the reasons why a living trust is better than a will is that if you need to pass your business to someone due to becoming disabled, a living trust can do this where a will can’t.

In the event that you became incapacitated, the person you designate in your will cannot take over control of your business until you actually die. This could cause a great deal of problem for your business, as well as your beneficiaries. In a situation like this your business may actually fold because of the lack of adequate structure and leadership.

If you use a living trust you can designate a successor trustee in the event that the main trustee becomes disabled. With a living trust the successor trustee can then step in and take over the running of the business while the main trustee is disabled and unable to run the business.

In the event that you do die, your will can then cover the transition of your business, but your estate will still be facing some problems. The person that you leave your business to will not actually have legal authority over that business until the probate process is over, and this could take months, especially if someone decides to contest your will. During this time there are a number of things that can harm your business.

The best way to avoid any of these problems is with a living trust. Business owners should seriously consider retaining the services of an experience estate-planning attorney to help them decide what they need to do with their estate plan to protect their business, and family. A living trust can also protect your other assets from probate, which will greatly benefit your loved ones after you are gone.

The last thing your family needs to deal with is legal problems with your estate during an already difficult time in their lives.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Estate Planning for Your Business

Sep 12, 2010  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Small Business Planning

If you own a business, you should take special care to include it in your estate plan. The value of your business will affect your estate worth, and the possibility of your death or disability will affect your business’s viability.

Evaluate the Business

The first step in business estate planning is evaluation. Consider what your business is currently worth and determine your long term goals. Next, estimate how much your business might be worth at the time of your retirement or after your death. This should tell you if you will have enough to retire and how your family’s inheritance will be affected.

Plan for Retirement

When you understand the current state of your business and your long term goals, it is easier to decide the future of your company and the best time to exit. Your exit can occur in several ways: selling the business to an outsider, selling the business to a family member or retaining the business and hiring a manager to run the daily activities.

Plan for Disability

A disability plan allows a friend or family member to make medical and financial decisions for you in the event that you are incapable. If you do not make a disability plan for your business, it may not survive your incapacity.

With a disability plan, you can name someone to run your business in the event that you become incapacitated. Having a plan in place will allow for an easier transition. It will also improve the odds that your company will remain healthy and continue to provide an income for you and your family.

Plan for Death

Death is imminent, so you must decide what will happen to your business in the event that you pass away while you are still in control of business affairs. You can name someone, such as family member to take over running your business. You can also dictate that your business be sold to provide income to your family. Whatever your wishes for your business after your death, you should make them known. If you do not, your business may not survive or it may falter during a period of mismanagement which could lower the value.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Choosing the Right Startup Business After Retirement

Jul 12, 2010  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Retirement Planning, Small Business Planning

If you’ve always dreamed of starting your own business, your retirement years may be the perfect time to make that dream a reality and you’ll find that you have a few advantages you wouldn’t have had before.

After you retire, you typically have more financial options to get your business started and you’ve got a retirement fund to live on while your business is getting off the ground. You’ll also find that it’s much easier to start a new business when you’re not having to work full-time somewhere else.

So, what kind of business should you choose?

This is one of those questions that only you can answer, but remember this: you have the unique opportunity to actually choose something you want to do versus choosing something because it pays well.

Most people spend their lives working at jobs that were not necessarily an ideal career choice, but paid the bills and was available when they needed work. But things are different this time around and while you’ll probably still want to make some money, you have the freedom to choose a business that’s rewarding as well.

The best way to choose the right business for you is to start with your own experience. You’ve spent the last several decades developing expertise in certain areas. Can you now use that expertise to create your own business?

Next, look at your hobbies and interests outside of the corporate world. If you have a knack for crafts for example, this might be something you can turn into a new business venture.

Keep in mind that some businesses are easier to start up than others and this will affect your ability to get things up and running quickly. If your business requires a large amount of materials to get started for example, you’ll have bigger startup costs than you would if you decided to pursue a service business on the Internet.

In addition, some businesses require special training, licensing or certification, so you’ll want to research your new business well before investing in supplies.

Just remember that your retirement years are called the “golden years” for a reason – this is a time that you should be enjoying yourself so choose a business that’s both rewarding and offers you the flexibility to enjoy the other areas of your life as well.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.