You put a lot of work into building your business, but what will happen to it after you die? That all depends on how you set up your estate. Good estate planning will preserve your assets and Las Vegas business when you die and transfer everything to your chosen beneficiaries. Here are some options for protecting your business and the consequences if you don’t make the proper arrangements.
How Can You Protect Your Las Vegas Business And Beneficiaries?
The best way to protect your business and beneficiaries after your death is to work with an estate attorney to include plans for your business in your will. But what kind of arrangements should you make? Your attorney can help you decide on a strategy that fits your exact circumstances and desires. But here are a few routes Las Vegas business owners can consider:
- Create a living trust that transfers ownership of your business to a trusted successor. This option keeps your business out of probate and minimizes your estate’s tax burden.
- Form a partnership with the person you want to take over your business. Make your desired successor a partner and make a buy-sell agreement that lists events (such as your death) that would trigger a sale of your shares to your partner.
- If you have a small business, you might be able to pass on your business to a trusted successor and avoid a tax penalty by simply gifting it to them. However, gifting must happen when you are still alive and ready to hand the business over.
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What Happens To Your Las Vegas Business When You Die Without A Will?
So what happens to your Las Vegas business if you die without a will? That depends on your business structure. Without specifying what happens to your business after death may open your family to civil litigation, but in general here is what could happen:
- If you own a sole proprietorship, your business will end with your passing, and all assets will go towards satisfying debts. Then your next of kin receive leftover assets.
- For an LLC, your operating agreement should include what happens to the business after your passing, such as who will take over for you. If there is no will, your business shares usually pass to your next of kin.
- Ideally, in partnerships, you already have a signed agreement for what happens to the business if a partner dies. But if a partner passes without such an agreement, intestacy law gives that partner’s business shares to their next of kin.
- Corporations usually have several shareholders to keep a business running if an individual passes away. However, if you are the only shareholder and die without a will, your estate becomes the “owner,” and stocks will be distributed according to intestacy laws.
In the absence of a will, your loved ones will have to navigate the often confusing probate process. Part of that means settling any business debts. If the debts exceed your assets, this can create a heavy burden for grieving loved ones. Then how your family uses your assets to pay off debts can also cause contention with your business partners and destroy what’s left of the business. Speaking to an estate planning attorney as soon as your business becomes profitable can prevent these problems.
Talk To Williams Starbuck About Las Vegas Business Estate Planning
If you’re a Las Vegas business owner who hasn’t started estate planning, take your first steps today by calling the estate attorneys at Williams Starbuck. Call us at 1-720-660-9847 or send us a message for a free consultation.