Each attorney with our firm understands that business owners are often so preoccupied with running the day to day operations of their businesses they often do not have time to properly think about, let alone actually put into effect, a properly designed estate plan. Ironically, the business itself, or proceeds from its sale, may be one of the most valuable asset that a business owner has to pass to his or her heirs and merits special attention and careful planning.
For businesss owners and non-business-owners alike, a basic estate plan mayinclude a will, general or special durable financial power of attorney, health care power of attorney, and a living will (sometimes called a declaration of desire for a natural death), as well as actions taken for dealing with non-probate estates, such as joint bank accounts and life insurance policieis with a named beneficiary. A will, and any seperately written codicil, can address the transfer of one's estate to heirs through both general and specific devisements. So-called "mirror" wills between a husband and wife reflect each other in leaving the majority of eachspouses estate to the other spouse, unless the other spouse predeceases them. In such case, the bulk of the estate is left to family members per stirpes (to children on a pro rata basis, then, if any child predeceases the parent, to the children of that predeceased child, and if no children or grandchildren then to siblings, and if no children, grandchildren, or siblings then to parents). In each and every case, devises of specific items to specific individuals can be made.
If the testator (creator of the will) has minor children, a testamentary trustcan also be built into the will in order to control when and how any of one's estate will go to one's children. Most people are reluctant to give any meaningful part of their estate to a minor or event to a child that has not reached some level of maturity and responsibility or will want to ensure that such estate being bequethed is used or withheld for a specific purpose or possibility, such as funding a child's college education. Thus, people creating wills will generally want to ensure that a testamentary trust is made a part of their will to address such issues, as well as to name a gaurdian for any minor children who will act both as gaurdian and as a trustee to any part of an estate left to a then minor child, to act in accordance with the testator's requests in the will.
A general or special durable financial power of attorney allows someone to grant legal authority to another person or persons to handle all or just some of their financial affairs during any time, and only for such time, as such person is mentally incapacitated, whether comatose from an accident, subject to senility, or other mentally incapacitating event.
A health care power of attorney and a living will have many similarities, but are different in scope. Whereas a health care power of attorney allows a person to authorize another to make health care decisions on their behalf generally (subject to guideliness and restrictions set forth by the person granting such authority in the power of attorney), a living will primarily addresses the issue of whether extensive measures should be taken to extend a person's life when such person is likely to thereafter remain in a vegative state despite such measures. Such desicions, of course, are difficult and should be carefully considered after all legal questions and concerns are addressed by an attorney competent in such areas.
Business owners, however, have estate planning needs and concerns that non-business-owners do not. Some business owners may at least have a will. Fewer still will have financial and health care powers of attorney or a living will.
If you are the sole owner of your business you will need to consider who will have the legal authority to immediately handle the needs and urgencies of the business and its obligations in the event of your ever becoming mentally incapacitated or upon your death and prior to a confirmation of a personal representative for your estate. For this reason, every sole business owner should consider having a financial power of attorney in place to grant a trusted person or persons the authority to address his or her business affairs during any period he or she is mentally incapacitated or prior to the court appointing or confirming a personal representative for his or her estate.
Similarly, every owner in a multi-owner business entity whether a partnership, corporation, or LLC should have either a business succession plan in place (particularly in a family owned business) or proper buy-sell agreement and funding mechanisms in place if the owner does not intend to pass her or her business interest on to his or her heirs. Buy-sell agreements are often funded with life insurance, disability insurance, or other pre-planned funding mechanisms.
Estate planning documentation includes, but is not limited to:
Contact an attorney with our firm today to begin planning for your estate planning and business needs. If scheduling a meeting with an attorney with our law firm, information such as a list of major assets and their approximate values, the names and addresses of specific heirs and at least two or three possible personal representatives for your estate, and one or more potential guardians for any minor children will be required, as well as the tax map numbers for identifying specific real estate.
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