If you own a business in California, including it in your estate plan is vital. Planning ahead protects your hard work, avoids costly delays and gives your loved ones peace of mind.
Here are three popular options for handling your business in your estate plan.
1. Set up a revocable living trust
A revocable living trust lets you transfer your business into the trust while keeping full control during your lifetime. If you pass away or become incapacitated, the person you name as trustee can step in to manage or transfer the business. This option avoids probate and keeps your business affairs private.
2. Create a buy-sell agreement
A buy-sell agreement is a legal contract between co-owners of a business. It can outline what happens if an owner dies, retires or leaves the business. This agreement may include terms for the remaining owners to buy out your share or allow a designated person to take over. It helps ensure a smooth transition and prevents disputes.
3. Name a business successor
If you want a specific person to run your business after you are gone, you can name a business successor in your estate plan. This person should be someone you trust and may already be involved in the business. Planning ahead gives them time to prepare and reduces the risk of confusion later.
Your business is one of your most important assets, and it’s important to include this in your estate plan. These are just three of several options available to you. To find out more about succession planning, it may help to seek some legal guidance.