Houston Estate Planning and Elder Law Attorney Blog
Do you own a small business? Have you accounted for that business in your estate plan? If you have, this is a good first step in protecting your business in the long-term future. After you die, your small business might be subject to the probate process. As part of the estate planning process, it is important to understand what probate entails so that you can adequately protect the business that you have worked so hard to build.
What are the Pitfalls of Probate?
Importantly, probate can take several months from start to end. Therefore, if you leave your small business to go through probate, the business will likely suffer. While the probate process is pending, the business’s assets will likely freeze. In addition, it can be unclear who is supposed to take the reins of the business during this transitional time, and this can in turn cause irreparable harm to the business itself.
How Does a Small Business Owner Avoid Probate Altogether?
It is best, then, to try and avoid probate altogether with your small business. There are several key strategies that can help you achieve this goal:
- Write a business succession plan: by taking the time to lay out a plan for your business in the event of your death, you can ensure a smooth transition after you are gone. A successful business succession plan requires buy-in from the person taking over your business, and it requires details about what that persons’ responsibilities will be.
- Create a living trust: you can use a living trust to ensure continuity after you are gone. The trust helps your business avoid probate altogether, while simultaneously protecting the business’s assets from outside creditors.
- Enter into a buy-sell agreement: you can also draft an agreement that, once properly executed, becomes legally binding and ensures the transfer of the owner’s business interest in the case of the owner’s death.
These are just a few ways that you can make sure your small business avoids probate when you are gone. Because life is full of the unexpected, we cannot emphasize enough how important it is to develop a thorough plan for your small business in case something unanticipated were to happen. By taking these important steps now, you can make sure your business succeeds in the long run.
Have You Retained Your Houston Estate Planning Attorney?
At McCulloch & Miller, we provide sound legal advice at every stage of your estate planning process. If you need a team of Houston estate planning attorneys you can trust, know that we are experts at leveraging our experience in the field to get hard-earned results for our clients and their families. When you need the best in the business, you need McCulloch & Miller.
For a consultation with a Houston estate planning attorney from our legal team, give us a call as soon as possible at (713) 333-8900. You can also fill out our online form to tell us about your goals and have an attorney reach back out to you as soon as possible to discuss next steps.