How to protect a business through estate planning
Estate plans can help anyone protect assets or ensure that his or her final wishes are carried out. However, those who own businesses in South Carolina or anywhere else should have an estate plan in place to protect their companies. Creating a plan may help ensure that the surviving spouse will have the financial resources that he or she needs after the business owner dies or becomes incapacitated.
In some cases, it may be best to sell the business and give the money to the surviving spouse. The other spouse could also be allowed to run the company and keep it in the family. If another person partially owns the company, it is a good idea to consult with that individual when making an estate plan. This is because a business partner might not want to be involved with the decedent’s spouse.
Having a buy/sell agreement could make it easier to resolve any problems that business partners might have after someone passes away. Married couples should have a conversation about what they want to do with a company if the business-owning spouse dies. Doing so can help ensure that all the parties understand what will happen to a business when the owner is no longer able to run it.
At a minimum, business owners and others should have a will that spells out how they want their estate handled. Furthermore, it may be a good idea to hold assets in a trust in an effort to avoid the need to go through probate. Assets may also be transferred through beneficiary designations or other agreements that are created during a person’s life. Special agreements may need to be drafted by business owners to ensure that their companies can survive after they pass on.