What Provisions Should Your Will Include if You Have Your Own Business?
Small Business Owners: Include These Will Provisions
There are many documents that can help business owners plan for their death. If you don’t have a will, click here to find out what will happen to your business upon your death. Trusts, buy-sell agreements, partnership agreements, and other legal documents can determine who owns or runs your business.
Benefits of using a will to Transfer Your Business
- Choosing an executor. You need someone you can trust to manage your business until someone buys or transfers it. First, if you own your own business, you should select an executor who understands your business. Or the executor should be able to work with professionals who can run the business until it’s sold or transferred. If your interest in the business is going to be for sale and purchased, the executor should understand how to get the highest value for your business.
- Stating exactly who owns your financial interest in the business. If there is no will, then the intestate laws determine who gets your share of the business. This may not be the person you want. With a will you can decide:
- Which relatives (either spouses, children, parents, siblings, etc.) get your interest
- Whether a business partner, co-worker, or employee should get your interest – instead of a relative
- Whether a corporation, organization, charity, or other entity should get your business interest
- Stating the terms of the sale. The owner of a business can set the value of the business and how it should be sold in the will. For example, the will could say whether the business should be sold privately, publicly, through a bulk sale, at auction, or by some other means.
- What powers the executor has to run the business until the terms of the will are met. Businesses must pay taxes, pay employees, and meet other financial, practical, and legal obligations until it is sold. The will can give the executor specific powers to manage the business and meet the duties of the business until it is sold.
Disadvantages to using a will to control your business
- Normally, a will is used to sell or transfer the business. If the business provided income for your family, you will lose that income.
- The business has to go through probate. This increases the risk that Inheritance and estate taxes may be due. It also means extra court costs.
- The business may lose value until a suitable buyer purchases the business
If you entered into a buy-sell contract, a partnership agreement, or a shareholder agreement; that document generally controls the sale or transfer of the business.
Review your financial and personal interests with one of our experienced Florida estate planning lawyers
There are many benefits to writing a will if you are a business owner. Our wills, trusts, and estate planning lawyers help Florida residents meet the end-of-life goals. We have helped prepare owners transfer businesses to family members, partners, and others. We’ve also helped families get the best price for their business. For clear guidance, please phone Lulich Attorneys and Consultants. You can reach us at 772-589-5500 (Sebastian) or 772-774-7771 (Vero Beach).