Request a consultation so we can help you identify, analyze, and protect your business from the variety of risks your business may face.
Estate planning is important for everyone and especially important for business owners, especially since they and their family members depend on the business for income, and the business often constitutes a significant portion of their net worth. Private Corporate Counsel’s estate planning lawyers work hand in hand with the firm’s business lawyers to ensure that the right plan in developed for business owners and their families.
An estate plan is a set of legal documents that give a person the opportunity to plan what happens to them and their assets if they become incapacitated, and what happens to their assets when they die. Generally speaking, there are six basic estate planning documents as follows:
The Three Typical Documents about your person
These are documents which allows you to provide instructions about who will be able to make decisions on your behalf about your care, including medical care, and how you want critical decisions to be addressed. The tree documents are:
- The pre-need guardian – this documents allows you to choose who you want as your guardian if you become incapacitated. Once you have chosen a guardian, the courts generally will honor your choice and appoint your designated person as your guardian if your guardian of your person. Your guardian can also be designated to control your assets while you are incapacitated.
- The health care surrogate – this document allows you to choose who you want to make medical decisions on your behalf if you become incapacitated. Once you have chosen a surrogate, medical providers will generally honor your choice and look to your surrogate to make medical decisions for you if your are unable to.
- Living will – this document allows you to decide what medical treatments you would and would not want to be used to keep you alive, as well as your other medical preference. This document can be used by you to provide instructions about your wishes to your family concerning medical care, life prolonging machines, and decisions in the event you are at the end of life.
The Three Typical Documents about your property
These are documents which allow you to provide instructions about what to do with your assets during your lifetime and when you die. If you do not have any of these documents, your assets will be distributed pursuant to the laws of the jurisdiction in which you die, which not be what you want. The three documents are:
This document allows you to give another person the authority to act on your behalf while you are alive. A power of attorney can take several forms, including:
- General Power of Attorney – this document is only good as long as you are alive and are competent. It can be used to give another person the authority to manage your assets, including selling, transferring and otherwise legally affecting your assets.
- Limited Power of Attorney – this document is only good for the specific purpose you authorize and for the specific time you authorize. It is also only as good as long as you are alive and are competent.
- Durable Power of Attorney – this document can be specific or general, and becomes ineffective when you die, but it can be used if you are incapacitated.
2-Last Will and Testament (“will”) – this document allows you to specifically designate how you want your assets to be distributed when you did. By using a will, you can specifically designate who gets your assets, and what assets they get. In order to transfer the assets to your heirs, they will have to go to court and open a probate estate and ask the court to authorize the distribution per your wish. The probate process can take up to a year, or longer, depending on the extent of your assets, and whether or not there are any conflicts between your heirs. The costs of administering your probate estate can three percent or more of your assets in attorney’s fees and further fees for the administrator of your estate, leaving less of your estate for your family. We recommend that you have a living trust do minimize these costs and shorten the process. With a living trust in place, you can have a “Pour-Over Will” to ensure that the assets you did not put into the trust can still be distributed to you wishes, by pouring the assets into your living trust when you die.
3-Revocable Living Trust – this document allows you to create an entity that the law recognizes as a separate “person” who you can transfer your assets to during your lifetime and upon your death. It gives you the opportunity to decide how you want your assets managed, actually manage these assets during your lifetime, and avoid the probate process when you die, saving your estate and your heirs substantial fees and costs, and time.
Other Documents and Options
In addition to the six estate planning documents, there are other documents which can be used in the planning process to ensure that government benefits are not lost, to provide instructions which will allow you to incentivize members of your family to grow and develop (go to college, etc…) and to ensure that your family is taken care of for generations.
What about the Business?
If you do not have a exit plan during your life time, such as selling the business to your employees or on the open market, or transferring it to family members as part of your succession planning, it is important to consider what to do with your business when you die. If you do not plan for this important issue, the business will be treated as another asset within your estate and will be either sold or wound down. Therefore, your heir may not be able to benefit from its true value. If you want to provide for the continuity of your business, and take care of your hires, your loyal workers, and your valued customers, you can plan for your succession by considering instructions in your revocable living trust, or create a special trust specifically for the business. This issue should be discussed with not only Private Corporate Counsel’s estate planning attorneys, but also the firm’s business and tax lawyers to ensure that the best plan is developed and implemented.
Are you ready to get started?
Request your consultation and we’ll get started.
Start Building Your Crisis Management Plan Today
Download your free guide, Managing Your Business Through a Crisis: 7 Steps to Success, and discover the top recommended ways to prepare your company for the unexpected.
Get Personalized Guidance From PCC
Request your free consultation and we’ll get you started on implementing strategies to protect your business.