Many entrepreneurs in Hunterdon County rely in large part on the income of their businesses. Since this income is responsible for sheltering the family, feeding them and providing a consistent standard of living, protecting the business is a necessity that shouldn’t be overlooked in estate planning. However, a survey of entrepreneurs found that few had engaged in even the basics of protecting their business interests.
The first documents a business owner will want to investigate are various powers of attorney, wills and living trusts. Most are aware of the health care proxy, which authorizes a specified person to make health care decisions in the case of incapacity. A financial power of attorney functions similarly by vesting a person with the ability to make financial decisions, such as conducting transactions, paying taxes and dealing with clients.
A last will and testament allows owners to clearly declare their intentions regarding business succession or liquidation. Wills may also be used to provide advance details for funeral arrangements, debt payment and other matters that will be difficult to handle for a family facing the loss of a loved one. The last is the living trust. Having the trust own the business can prevent the legal hassles of probate.
The decisions made when drafting estate planning documents partly rely on the individual’s situation and intentions. A business owner seeking to minimize tax implications for beneficiaries and ensure that the business remains in capable hands during an absence and after the owner dies may be best served by seeking the assistance of an attorney. The creative application of estate planning strategies can help owners and their families reach financial goals and protect their valuable source of income.