If you do not already know, estate administration is the process of collecting and managing one’s estate after death. Often, it is best to leave behind a clear and concise plan. For entrepreneurs in Texas, it is especially important to leave a good plan for family, friends and the people in charge of estate administration. Therefore, assets can quickly be divided and debts paid. While estate planning is often the last thing on a busy entrepreneur’s mind, leaving an estate untended can bring about financial and emotional problems.
If you are in charge of finances and run day-to-day operations within the business, your spouse should also understand business operations and finances. Many company owners fail to realize the impact that having a business can have on families once they are gone. Many people prefer the stake in their company to pass to business partners, but if this plan is overlooked in estate documents and preparations, one’s investment in a company can land on a spouse. Ensuring a buy/sell agreement is in place can help avoid this problem. Such agreement can detail plans about the business and how shares should be sold.
Also, if you own a business, you probably want to protect your assets, which you have earned from operating the company. An irrevocable trust can be an important tool to help protect assets from creditors. These types of trusts act as “protective housing” for someone’s assets and also give the grantor tax relief while transferring assets to the trust.
Proper estate planning can offer those in charge of estate administration a sense of relief when having to manage the estate. It can also help protect financial assets, avoid issues with ownership of any businesses and also provide heirs with the inheritances they deserve.
Source: Forbes, “Preparing For The Inevitable: 3 Keys To Estate Planning For Female Entrepreneurs,” Judith Schreiber, June 13, 2012