Easter is here, and, even if you don’t celebrate, you’ve probably heard the saying, “Don’t put your eggs all in one basket” before. This saying is used to caution people against putting all their effort, time, and money into one thing. For example, if you’re starting a business, you might hear that phrase as a way to warn you against relying too much on that endeavor as your sole source of income.
As estate planners, we believe that you can put all your eggs in one basket, as long as you protect the basket. Whether it’s building a new house, starting a new business, or getting married, going for broke is fine, as long as you have the necessary precautions in place.
Ways to Protect Your Business
Estate planning for businesses is a common theme in this legal field. Businesses are peoples’ prides and joys, and they want to ensure that the company is protected long after they are gone. Here are some estate planning tips for businesses that you may or may not have heard of:
- Basic Will/Estate Plan. You always want to start with this. You should have your own personal will and estate plan, including important documents like power of attorney(s), before you begin planning for your business. After all, you are the owner.
- Tax Efficiencies. If you hire an estate planning attorney, chances are, as long as that attorney is competent, you’re going to be able to legally save some money on your taxes. That’s another reason why business estate planning is so important—you can cut your tax burden down if you do it properly.
- Family-Owned Issues. If your business is family-owned, you will want to sort out any inheritance or takeover issues that are present before you draft the estate plan.
- Succession Plan. What do you want to happen to your business after you pass away? Drafting a succession plan, which should include all of the necessary information about your business and a detailed plan for what will happen when you’re gone, provides an outline for people to follow when determining the fate of your company. You can also draft a buy-sell agreement or a different document, depending on what you want to happen.
- Insurance. You should purchase life and disability insurance as a failsafe. That could provide you with the monetary resources you need to keep your company afloat if something happens to you.
When you get married, make sure you update your estate plan to include your new spouse as a beneficiary. If you and your spouse want children, the birth of these children will also require an estate plan update. The same goes for the end of the marriage—if the nuptials end badly, you’ll want to make sure your estate plan does not include your ex. When it comes to marriage, be prepared either way.
Estate Planning for Your Home
Your home is likely one of the most important things in your life. Estate planning can help minimize the tax burden on your home, and there are several different options for transfer, if you want to pass your home down. These options include (but are not limited to):
- Co-Ownership. You can put your heirs as your co-owners on the current deed, though this simplistic approach does not work for everyone.
- Will. Of course, you can also pass down your home using a will. Just note that this document will have to go through the probate process in order to effectuate the transfer.
- Trusts. Revocable trusts, as well as qualified personal residence trusts, are two options for passing your home down that do not require going through probate court.
- Transfer on Death. This “TOD” deed is not offered in Florida. But, if your family owns property in other states, this could be a quick, private option for home transfer.
- Selling. If there is no one who wants your home, you could sell it and rent a house later in your life, though there are a lot of factors (bills, health, lifestyle, taxes, ad maintenance) that factor into whether this option will work for you.
Essentially, you should follow your dreams, but you shouldn’t rush headlong into them without some sort of estate plan. Contact a WFP attorney to discuss ways to be daring and bold while also being reasonably cautious.