After you die, the decisions regarding your business are contingent on the type of business you own. A sole proprietorship will go through your probate estate because you own it. If you don’t have a will outlining your probate estate, it will be determined by law. If you have a corporation that shareholders own, your shareholders will take it over. Finally, you should have an operating agreement that specifies the following steps if you have an LLC.
Can I Implement Planning That Will Allow My Business To Continue Operating After A Incapacity Or Death?
You can implement planning that will allow your business to continue operating even after death or incapacitation. The first step in planning for this scenario is putting your business into a corporation or LLC. Your business can also be put into a trust. A trust can be a promising strategy for sole proprietors because the trust will own the company, and thus the company will continue after your death.
What Happens To My Business Debts After I Die?
If your business is a sole proprietorship, the debts payable by your estate will go into your estate after your death. If you have a corporation or LLC, the debts of the corporation and the LLC are not your personal debts.
Can I Protect My Heirs From Business Debts After I Die?
You can protect your heirs from business debts after your death. The best way to do so is through a trust or an LLC. With either a trust or LLC, the debts will remain with the company. If you are a sole proprietor and have a trust that owns your business, the trust will be liable for the debts.
How Do I Structure My Assets In Such A Way That Limits My Exposure To Potential Liability?
The best way to minimize your exposure to liability is to have your business in an irrevocable trust. A corporation, LLC, or sole proprietorship can all be owned by a trust. If your business is in a revocable trust, the courts or creditors can bypass the trust in certain circumstances. However, if the trust is irrevocable, it cannot be circumvented.
How Can I Set Up My Qualified Retirement Accounts To Pass To My Beneficiaries In A Protected And Tax Efficient Manner?
The best way to set up tax-efficient retirement accounts for beneficiaries is to create a trust and then make your IRA, retirement account, or any protected account a beneficiary of those accounts. Upon death, those funds will immediately be passed to your beneficiaries, tax-free as any inheritance is. It is not generally advisable to change the owner of the IRA to your trust because that could create a taxable event. Instead, simply designate the trust as the beneficiary of your protected account.
For more information on Handling Your Business Affairs After Death, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.