Probate court is similar to a battlefield for most beneficiaries. It can take months or years to finally find a settlement that works for everyone, especially when a business is involved.
Luckily, company owners have multiple defenses to help protect their businesses and keep their executors out of probate court.
Four tools that every business owner needs
Estate plans are the final protection for your company, so implementing the right tools in necessary, including:
- Trusts – These tools are beneficial when used accurately. There is also a variety of trusts to choose from, including revocable or irrevocable trusts. Both trusts have benefits in terms of taxation or company control, so you need to evaluate all your options before finalizing your plan.
- Wills – Wills are necessary to avoid probate disputes among your friends and family. However, wills can act as proper instructions that must be legally executed. It may include details from who runs the company after you pass or what happens to the business in case it goes to court.
- Insurance – Owners may want to set up a life insurance policy to make sure that the financial aspects of the business may be covered, including buy-sell agreements or transferring the titles to other beneficiaries.
- A business continuation plan – Finally, entrepreneurs need to establish a predetermined plan for the business after you leave. The continuation plan includes how to address debt repayments, employee management and the company’s next owner. It is flexible to whatever you need for the future of your business.
Developing an extensive estate plan is the ultimate defense of dragging your beneficiaries through a grueling probate process. You need to find what tools work best for you and your company, but make sure you adopt a system before it’s too late.