Estate Planning and Small Business Owners

One important aspect for small business owners is to make sure that their estate plans are also put in place along with their appropriate business entities. If you own an interest in a Corporation (C or S corp), LLC or partnership, it is important to address what happens to that business interest should something happen to you or if you pass away.

A buy-sell agreement is one option (which won't be discussed here in this post) and setting up an estate plan is another option often considered. If you set up an estate plan to include a revocable living trust, you can assign or transfer your business interest into your trust and specify what happens to that share of the business interest.

One common approach for married couples is to transfer the business interest to the trust and allow the surviving spouse to manage the interest and upon the death of both spouses, the interest is then transferred to the surviving children either in equal shares or to the child who is most interested in the business interest (for whatever reason). Additonal lanugage can be included depending on the type of business interest involved and what your wishes are in case something happens.

Please consult with an estate planning attorney to determine if your business interest should be included as part of your personal estate planning. Tredway, Lumsdaine & Doyle has four estate planning attorneys to assist clients with these kinds of issues. One of our partners, Mark Doyle, is also a corporate and tax attorney who can provide additional insight and expertise in this area should you have a very successful small business in need of estate planning or other corporate work.

Article Submitted By: Attorney Jennifer Sawday