Estate Planning for Small Businesses

Posted by on Oct 15, 2019 in Legal News |

When people think of estate planning (do people who aren’t lawyers think about estate planning?), they generally only consider it in an individual sense. That’s an important area of estate law, but it is not the only area, by far. Estate planning for small businesses is vital to ensuring the long-term success of your business. You’ve worked hard for what you have, and you want it to last. 

Here are some issues affecting small businesses that make it vital for small businesses to engage with an estate planning attorney:

Taxes 

It’s nicknamed the death tax, but the IRS pretends that nickname doesn’t exist and instead calls it the estate tax. The death tax still exists, and it will affect your small business if the business is part of your estate and meets the financial threshold. The death tax is a tax on the decedent’s (dead person’s) right to transfer their property after death. 

That’s right, even your exit from this earth is taxed. Your small business could be affected by this tax, losing some of its value. However, there are exclusions you can claim or potential deferments of which your heirs can take advantage of. Estate planning will help minimize the tax burden that your small business faces when you pass on.

Trusts, Wills, and Avoiding Probate 

Speaking of transferring property, do you know what will happen to your company if you die? Estate planning for small business includes plans for what will come after the death of the owner. A healthy estate plan will allow your business to avoid probate or being picked apart by creditors. That way, your company’s financial future is far more secure.

Buy-Sell Agreements 

If you aren’t the only owner of your business, you should look into a buy-sell agreement, which will likely be necessary in this situation. Simply put, this type of agreement mandates that the shareholders, upon your death or some other condition, sell their stake at fair market value to others. 

Family-Run Business Issues 

Family-run companies might run into different legal issues than other small businesses, particularly when it comes to succession plans. Family businesses keep things in the family, but there also tends to be an informal structure and culture. There might be pressure to hire other family members, a lack of training, high turnover for non-familiar employees, and other issues that come from keeping a business in the family. 

This isn’t to say that family-run businesses aren’t awesome—they are. But, they do experience their fair share of potential pitfalls specific to such a personalized enterprise. Estate planning, especially for family businesses who have an informal structure, will provide a firm plan and minimize disputes that could otherwise be the downfall of your small business.

Insurance

Life insurance is great for a small business owner because, if the owner dies, the business might not provide enough money for the owner’s family to live on. Life insurance is a big-picture policy. Term life insurance will help you provide for your family after you pass on. 

Sole Proprietorship Concerns

Succession plans are especially important for a sole proprietorship. If you are a sole proprietor, estate planning will help you tell your heirs either how to run your business when you’re gone or what to do with it when you pass away (sell, transfer, etc.). Estate planning will help you lay out that information for your heirs and make the succession and transfer of the company as smooth as possible. 

Small business estate planning is no small matter. Whether you own a sole proprietorship or an LLC, there are a lot of ways that estate planning can provide for your business’s future. There is no reason a good business with a solid financial foundation should be brought down by an issue estate planning could fix. Contact an estate planning attorney today.

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What is Elder Law?

Posted by on Oct 7, 2019 in Legal News |

As with any demographic, there are issues specific to the elderly that other age groups don’t experience in as pressing a way. Elder law is a subset of the law that focuses on these issues that affect elderly people. The exact definition of elderly is up for debate, but know that you don’t have to be an octogenarian or above to deal with the subject matter of elder law. In this post, we will discuss the various legal issues that concern elderly people in particular. 

Healthcare 

Everyone experiences health issues at some point. Hopefully, these aren’t serious or severe, but they are something we all live with in one way or another. Seniors experience healthcare concerns in a more pressing way. As the sunset of someone’s life begins, long-term care and healthcare decision-making become things to think about. 

Long-Term Care 

Long-term care refers to nursing homes or assisted living. Nursing home and assisted living care is not cheap, and picking out a facility you will be comfortable in is no small decision. Legal issues concerning payment for long-term care and disputes about payment and care are subsets of elder law that focus on protecting would-be and current patients. 

Care for the Incapacitated 

There is always a chance that someone may become so sick or incapacitated that they cannot make decisions for themselves. In this situation, the issues of a living will or healthcare directive come into sharp focus. A healthcare directive is a way to delineate ahead of time your wishes for the nurses and doctors taking care of you. That way, if you are too sick to tell them what you want when you’re in their care, they have a document to refer to. 

Estate Planning 

Asset protection and determining where your assets will go after you pass on is a huge subset of elder law. Wills and trusts are legal instruments that allow you to transfer your assets to your loved ones (or to creditors). Through careful estate planning, you can avoid probate court. Your family will not have to go through that lengthy, unpleasant process, and you will know that your possessions are where you want them to be—not with the state.

Government/Private Benefits 

Seniors also receive a variety of government or private benefits, such as SSI, veterans’ benefits, disability, and/or pensions. Every senior’s financial package is different, and you want to make sure that you’re getting what is owed to you without delay. Elder law focuses on the disbursement and dispute-resolution of benefits. Again, this is designed to protect the senior beneficiaries.

Taxes 

Gift taxes and estate taxes tend to affect seniors more as they distribute their assets in wills or trusts. Whether you’re exempt from an estate or gift tax is sometimes unclear, and elder law dealing with tax issues will ensure that you do not run afoul of the IRS. Additionally, tax specialists working in elder law can help minimize the tax burden you or your donee will face. No one likes taxes, and if there is a legal way to reduce them, a tax attorney can figure that out for you.

Capacity 

Capacity is a tricky subject, and it often comes into play for seniors who are dealing with memory loss or similar issues. There may be disputes over a senior’s capacity to execute their will or make financial or healthcare decisions for themselves. Elder law protects seniors from inaccurate determinations of their incapacity. Conversely, elder law can protect incapacitated seniors from making decisions that will harm them later on.

Will Contests 

Will contests are technically an area of elder law, as the will in question is usually that of a senior who has passed on. Will contests are not overly-uncommon. An estate attorney will help the drafter of the will construct a document that will minimize the chance of a posthumous feud.

These are just some of the legal issues that affect seniors more directly than the rest of the population. This doesn’t mean that someone young shouldn’t take part in estate planning; it just means that elderly people should be aware that there is a whole subset of the law dedicated towards helping them.

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