When a New Jersey business owner dies unexpectedly, the company may be damaged if the owner did not have an estate plan in place. Owners can use several different estate planning tools in order to protect their businesses in the event something unexpected happens.
Estate planning helps business owners to think about and plan for their company’s future. It can also help to avoid estate taxes. Some business owners may benefit by establishing grantor retained annuity trusts. These allow the owner to transfer the business to his or her children while also keeping income from it.
A good plan can also help the business to survive as it transitions to the next generation of heirs. If there is more than one co-owner, they should consider entering into a buy-sell agreement. This type of agreement provides that the remaining owners can purchase the deceased owner’s share instead of it passing to that co-owner’s family unintentionally.
A small business owner may want to meet with an estate planning attorney in order to learn about the options that are available. One type of estate planning tool that a business owner may not want to overlook is a durable power of attorney over his or her company. Durable powers of attorney provide that a designated person can make important financial decisions for the business in the event that the owner becomes incapacitated and unable to make them. This can help the company to continue functioning and running smoothly in the event of an incapacitating illness or injury that the business owner suffers.