As a business owner, are you hoping to build a legacy you can pass on to your loved ones? Many people fail to recognize that their business is an asset that can be lumped together with their other assets. You want to avoid this and protect your business from probate in Florida. Estate planning is critical if you want to pass your business down to the next generation without unnecessary complications.
If you’re interested in learning more about how to avoid probate in Florida, we can help!
Here’s a guide on how to protect your business from probate.
Establish a Living Trust to Protect Your Business
A will designates the distribution of assets when a business owner dies. A trust allows the business owner to distribute assets while they’re still alive.
When a trust is already established at the time of your death, it reduces the need for probate. Your business is part of the trust.
It’s essential you put some thought into who you name as trustee in your stead. The trustee’s role is to transfer your assets to your designated beneficiaries and avoid probate.
Joint Ownership
Many people do not name their business partners or family members as official joint owners. If your name is the only one on your business, consider joint ownership as an option.
Joint ownership can help simplify the inheritance process following the death of a business owner. It may help your loved ones or business partners avoid the probate process.
Many bank accounts and ownership titles allow you to designate an automatic beneficiary to avoid probate. To execute this process, you can complete a Transfer on Death (TOD) form.
Talk to a Florida business attorney about the best ways to protect your business.
Corporate Stock and Business Interest
Do you hold interest in a business through owning corporate stock? If so, it’s a good idea to place those business stocks in a trust.
You can protect your partnership or LLC membership interest with the trust as well. You can assign or transfer interest with a revocable trust.
This can help you avoid having to relinquish control of any business shares.
Business Continuation Plan
The idea of building a legacy or having something to pass on to your children or loved ones is a primary force for many business owners. It’s true that the structure of your business will play a large role in how it will be handled.
There is another business planning tool you can use to solidify what happens to your business when you’re gone. A business succession plan outlines your wishes for the transition of your business.
For some business owners, this transition occurs during retirement. For others, health issues may be the catalyst.
If the business owner continues working, the succession plan can be implemented after they pass away.
Some common elements of a succession plan include:
- Anticipated transition time
- The designated successor (s)
- Communications with family, clients, or staff
- Tax planning and business valuation
- Provisions for the plan’s implementation
In addition, you can implement a larger business continuation plan. It can be as comprehensive as you wish to avoid confusion and chaos after your death.
It may include a buy-sell agreement, gifts of stock, joint ownership plans, or other arrangements of your choice. You can outline who will manage your business or how to pay off debts if needed.
The beauty of a business continuation plan is the peace of mind it brings, knowing you’re protecting your business and your successors.
Protect Your Business by Keeping Assets Separate
As a business owner, you want to maintain a separation and distinction between your business and personal assets. Without this, the lines can blur and make it more difficult to separate the two in your estate planning.
This is also a critical practice for your taxes and for shielding yourself from liability issues. Keeping your assets separate is a must to avoid probate issues with your business assets.
Protect Your Business’ Real Estate Interests
If your business is a legal entity that owns property, that real estate is an asset of the business. In some situations, there may be another owner who rents the property to the business.
In these circumstances, you can circumvent probate with joint ownership titling with the right of survivorship. This involves a transfer on death deed, which allows a transfer of property ownership to someone else.
As you plan for the future of your business, consider owning real estate in a corporation or LLC and holding the interest in a trust. An experienced business attorney understands Florida Probate laws and can help you avoid probate issues and plan for the succession of your business.
Why Does Avoiding Probate Matter?
Protecting your business from probate keeps your loved ones out of court and provides a smooth transfer of your business. More than likely, your estate will open a probate after your death.
In Florida, this can be a way for family members to avoid creditors. But you still want to do what you can right now to keep your assets out of probate.
This will help you lower the amount your estate will have to pay. It’s even more important to keep your business assets out of probate to simplify the transition of your business after your death.
When the court is involved, the transfer takes longer, and the future of your business is in limbo. It’s much better to protect your business from probate now and protect the ones you love.
Outstanding Florida Business Law Attorneys
Your business is important to you. You’ve poured so much into it, and you want to be in control of its future.
Working with a business law attorney to create a business estate plan can help you protect your business interests, avoid probate in Florida, and ensure the future succession of your business.
At Boyer Law Firm, you don’t have to make these complicated business decisions on your own. Our business attorneys are here to help you every step of the way.
If you’d like to learn more about business estate planning or how to avoid probate issues, we’d love to speak with you about your legal options.
Schedule a consultation with Boyer Law Firm today.
